Oil prices eased during Tuesday's Asian deals, retracing the previous session's gains as investors weighed a temporary halt in hostilities between Iran and Israel and assessed the implications for global energy supplies.
By 2:50 pm AEST (4:50 am GMT), Brent crude futures were down 78 cents, or 0.8%, at US$93.36 a barrel, while U.S. West Texas Intermediate crude fell $1.23, or 1.3%, to $90.08 a barrel.
The declines followed a volatile trading session on Monday, when crude prices surged as much as 5% after renewed Israeli strikes on Iran and attacks in Lebanon diminished hopes for an immediate resolution to the broader regional conflict.
Market sentiment improved after Iran and Israel said they had suspended attacks against one another following an appeal from U.S. President Donald Trump that both sides immediately "stop 'shooting".
However, investors remained cautious as both nations indicated the pause could prove temporary.
Tehran warned that military action would resume if Israel continued operations against Hezbollah in Lebanon, while Israeli Prime Minister Benjamin Netanyahu said Israel would respond forcefully to any further Iranian attacks.
In a televised statement, Netanyahu reiterated that Israel remained prepared to defend itself and would not hesitate to retaliate if hostilities resumed.
Adding to the diplomatic pressure, Trump told Axios in an interview published on Monday that he had warned Netanyahu that Israel could find itself isolated if it returned to direct conflict with Iran.
Despite the easing in immediate tensions, traders continued to monitor developments surrounding the Strait of Hormuz, one of the world's most strategically important energy chokepoints.
The reopening of the waterway remains a central issue in ongoing negotiations between Washington and Tehran.
Before the outbreak of hostilities earlier this year, approximately one-fifth of global oil supplies passed through the Strait of Hormuz.
The route has faced significant disruption since U.S. and Israeli airstrikes on Iran began at the end of February, contributing to heightened volatility across global energy markets.
