Proposed joint shipping route eases supply disruption fears, weighing on crude prices in late trading.
Oil futures extended losses Tuesday after Iran and Oman announced plans for a temporary shipping lane through the Strait of Hormuz. The proposal aims to mitigate risks of prolonged disruptions in the critical chokepoint, which handles about 20% of global crude flows.
Prices had already retreated from earlier highs amid easing Middle East tensions. Analysts noted the framework remains unfinalized, with implementation details and timing unclear. The Strait has seen sporadic closures in past geopolitical flare-ups, often triggering sharp price spikes.
Markets reacted cautiously, with U.S. crude futures paring some losses but remaining lower on the session.