Oil prices ease on hopes of new US-Iran peace talks

Oil prices dipped in early Asian trade on Tuesday as hopes of more peace talks between the US and Iran eased concerns about further disruptions to energy supplies.

The price of global benchmark Brent crude fell by about 1% to $98.40 (£72.85) a barrel, while US-traded oil dropped by 1.7% to $97.40.

President Donald Trump said that Tehran has contacted Washington about a potential agreement.

Earlier, oil prices jumped above $100 a barrel following Trump's order to blockade Iran's ports after negotiations failed between the two sides at the weekend.

Speaking to reporters outside the White House on Monday, Trump said: "I can tell you we've been called by the other side. They'd like to make a deal very badly."

Separately, the New York Times reported that Iran had proposed suspending uranium enrichment for up to five years, an offer rejected by the US which insisted on 20 years.

The report, which cited Iranian and US officials, also said Washington and Tehran had traded proposals for suspending Iran's nuclear activity during talks in Pakistan, but remained far from an agreement.

But it added that the discussions suggested there may still be a path to a peace deal, with a possible second round of face-to-face talks.

The BBC has contacted the White House for comment.

Asian stock markets edged higher on Tuesday. The Nikkei 225 index in Japan gained by 2.6% while South Korea's Kospi exchange jumped by more than 3%.

Countries in Asia that are heavily reliant on energy from the Gulf have been hit hard by the fallout of the Iran war.

The Strait of Hormuz has become a key flashpoint of the conflict after Iran retaliated against US-Israeli strikes since 28 February by threatening to attack vessels that try to use it.

Energy prices have surged as nearly a fifth of global oil and gas shipments usually pass through the strait.

US Department of Energy Secretary Chris Wright said on Monday that he expected oil prices to peak in the coming weeks as the waterway remains effectively closed.

"We're going to see energy prices high - and maybe even rising - until we get meaningful ship traffic through the Strait of Hormuz," Wright told the Semafor World Economy Forum in Washington.

"That'll probably hit the peak oil price at that time. That's probably sometime in the next few weeks."