Oil prices remained under pressure on Tuesday after suffering steep losses over the previous two sessions, as growing optimism over a potential breakthrough in US-Iran diplomacy raised hopes that the Strait of Hormuz could soon be reopened to normal shipping, easing fears of disruptions to global crude supplies.

Brent crude traded below the psychological $80 a barrel at $78.68, while US West Texas Intermediate (WTI) at $74.94, extending a sell-off that has seen benchmark prices tumble by more than 10% over the past two trading sessions.

The decline follows indications that efforts to defuse tensions between Washington and Tehran are gathering pace. Qatar said negotiations aimed at resolving the US-Iran conflict were in "very progressive stages", with draft proposals for a possible agreement already being circulated, although no direct talks are currently taking place between the two sides.

The diplomatic momentum gained further support after Qatar's Emir held talks with US President Donald Trump on ways to bridge differences with Iran, while Oman has continued its behind-the-scenes mediation efforts. The developments have fuelled expectations that shipping through the Strait of Hormuz — the world's most important oil transit chokepoint carrying roughly a fifth of global oil consumption — could soon resume without disruption.

Markets have also reacted to reports that the United States is keen to avoid a prolonged military confrontation in the region, partly because of concerns over dwindling interceptor missile inventories after months of heavy deployments across multiple conflict zones. The prospect of a diplomatic solution has reduced the geopolitical risk premium that had driven oil prices sharply higher in recent weeks.