RoydadNaft –  Brent crude futures fell 50 cents, or 0.57%, to $87.22 a barrel. U.S. West Texas Intermediate (WTI) crude futures dropped 36 cents, or 0.44%, to $81.77 a barrel.

According to Roydad Naft, oil prices edged slightly lower on Tuesday after earlier reaching their highest levels in more than a week. Analysts were assessing signs of progress in talks between Oman and Iran over shipping through the Strait of Hormuz, while disruption to Middle East energy flows continued.

Brent crude futures were down 50 cents, or 0.57%, at $87.22 a barrel by 1317 GMT. U.S. West Texas Intermediate crude futures fell 36 cents, or 0.44%, to $81.77.

Both benchmarks had hit their highest levels since July 31 earlier in the session, with Brent rising as high as $90.03 a barrel and WTI touching $84.61.

Qatar’s foreign ministry spokesperson said on Tuesday that talks between Oman and Iran on the future of shipping in the Strait of Hormuz are now at an advanced stage.

Fawad Razaqzada, analyst at City Index and FOREX.com, said: “Any signs of de-escalation or any signs of a deal are good news for risk assets and bad for oil, obviously. But it’s all talk at the moment. It’s all headlines. There’s no meaningful progress.”

Both contracts had jumped more than 5% on Monday after U.S. President Donald Trump responded to Iran’s conditions for a peace deal with his own demands that Iran pay compensation for people killed in wars, attacks and protests. This is likely to complicate efforts to reopen the Strait of Hormuz.

Razaqzada added: “I don’t see oil going below $80 any time soon, unless there’s a surprise announcement of a deal that reopens the Strait of Hormuz, because the oil market is tightening.”

Geopolitical risk continues

Shipping data showed that traffic through the Strait of Hormuz dropped to six vessels on Monday, compared with a 10-day average of about 11 vessels.

In a note on Monday, Barclays analysts said that crude oil and refined product net exports through the Strait of Hormuz averaged 3 million barrels per day in the week ending August 7, down from 4.4 million bpd the previous week.

Before the Iran conflict began in late February, about a fifth of global daily oil and liquefied natural gas supplies passed through the Strait of Hormuz.

A small cargo ship was attacked by Yemen’s Iran-aligned Houthis in the Bab el-Mandeb strait on Tuesday, killing three crew members, according to two Yemeni coast guard sources and two military officials in the government.

The Wall Street Journal reported on Tuesday, citing a U.S. official, that a U.S. military helicopter fired at the rudder of a Panama-flagged ship after its crew ignored warnings from personnel enforcing a naval blockade on Iranian ports.