Oil prices declined in Asian trading Tuesday as investors weighed geopolitical risks against emerging signals of potential diplomatic breakthroughs. The U.S. blockade of Iranian ports, initiated to compel Tehran toward a lasting settlement, created competing pressures in the market.

Brent crude futures dropped 1.3% to $98.04 per barrel, while West Texas Intermediate fell 1.7% to $91.34 per barrel by 00:03 ET. Both benchmarks had retreated more than 2% earlier in the session.

Vance Signals Limited Progress in Iran Talks

U.S. Vice President JD Vance struck an optimistic tone Monday evening, countering reports of failed negotiations conducted in Pakistan over the weekend. In a Fox News appearance, Vance cited constructive discussions and noted the onus now rested with Iran for de-escalation efforts.

Vance outlined Washington’s core demands: the cessation of U.S. military strikes, full reopening of the Strait of Hormuz, and termination of Iran’s nuclear enrichment program. “There really is a grand deal to be had here,” Vance stated, “but it’s up to the Iranians to take the next step.”

Blockade Begins Amid Mixed Market Signals

Crude prices rallied sharply Monday but retreated from intraday peaks after Trump announced 34 vessels transited Hormuz before the blockade commenced—the highest traffic level since late-February hostilities erupted. However, MarineTraffic.com data suggested most shipping continued avoiding the passage as of Tuesday morning.

The blockade commenced Monday following unproductive ceasefire talks. Iran’s nuclear activities, Hormuz access, and alleged backing of militant groups remained deadlocked. While Tehran rejected future negotiations and Trump expressed indifference to Iranian participation, diplomatic efforts from regional and Asian powers reportedly continued.

A fragile two-week ceasefire between Washington and Tehran held intact as of Tuesday, with no recorded strikes since at least Sunday. March saw record crude gains as U.S.-Israeli military operations disrupted roughly 20% of global oil supply, with Iran closing Hormuz and attacking Middle Eastern energy infrastructure.