Oil ticks up after selloff as talks to end US-Iran war remain uncertain

Front-month Brent futures rose $0.62, or 0.7%, to $84.39 a barrel as of 0055 GMT after dropping 7% in the previous session to a three-week low.

U.S. West Texas Intermediate (WTI) crude was $0.61, or 0.7% higher at $80.95 after falling over 5% in the previous session to its lowest in nearly a week.

Prices dropped after U.S. President Donald Trump said on Sunday he was holding off on new attacks on Iran pending ongoing talks to end their war and settle claims over control of the key Strait of Hormuz. The waterway connects Gulf oil producers to global markets and before the conflict energy exports equal to about 20% of total consumption transited daily.

However, on Monday, Iran's Foreign Ministry spokesman Esmail Baghaei rejected Trump's claim, saying no negotiations with the U.S. were taking place and no meetings were scheduled.

In the Red Sea, six Saudi-flagged supertankers changed course in the Gulf of Aden recently and are heading to southern Africa, while two tankers laden with Saudi oil crossed the Bab el-Mandeb Strait, shipping data showed on Monday.

Traffic in the Strait of Hormuz between Iran and Oman also slowed following reports of vessel attacks, the data showed.

Hormuz remains dangerous for vessels. The United Kingdom Maritime Trade Operations on Tuesday said it received a report of an incident 20 nautical miles (37 km) northeast of Oman's Al Khasab, after a cargo vessel broadcast over VHF channel 16 that it had been hit by an unknown projectile.

"While the fighting between Saudi Arabia and the Houthis has not completely halted energy flows, it has forced longer voyage times, higher insurance costs and occasional diversions. With the Strait of Hormuz, it keeps a dual-chokepoint risk in the market that prevents oil from fully unwinding its geopolitical premium," Waterer said.

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