NEW DELHI: Oil prices edged higher on Tuesday after falling around 1% earlier in the session, as prospects of diplomatic talks with Iran eased concerns about wider disruptions to Middle East supplies, while renewed Houthi attacks on Saudi Arabia kept geopolitical risks elevated.
Brent crude futures rose 40 cents, or 0.4%, to $116.24 a barrel by 0718 GMT, while US West Texas Intermediate crude gained 30 cents, or 0.3%, to $102.07. Both benchmarks had declined by around 1% earlier in the day.
Saudi Arabia, Turkey and Pakistan held talks with Iranian officials in Tehran on Monday to ease regional tensions. Iranian state media reported that the four countries agreed to continue discussions aimed at strengthening cooperation on peace and security.
Sugandha Sachdeva, founder of New Delhi-based research firm SS WealthStreet, said oil prices remained elevated amid geopolitical uncertainty, while hopes of progress in US-Iran negotiations had prompted some investors to take profits.
Brent crude surged above $117 a barrel last week, reaching its highest level since April following a wave of Iranian attacks on tankers near the Strait of Hormuz. Prices also touched $117 on Monday.
However, prospects for a diplomatic breakthrough remained uncertain following renewed attacks by Iran-aligned Houthi forces on Saudi Arabia, a key oil producer.
Data from a Washington-based think tank showed that October had recorded the highest number of attacks on commercial shipping in the Strait of Hormuz and nearby waterways among the maritime security incidents it had tracked since 2017.
The conflict, which escalated in February, has highlighted the strategic importance of the Strait of Hormuz, through which around one-fifth of global energy supplies passed before the war.
ANZ Research said the oil market remained vulnerable to disruptions affecting supply, logistics, inventories and refining.
Gulf crude exports declined for a fourth consecutive week, while oil flows through the Strait of Hormuz stood at about 60% of normal levels. Global distillate inventories were also nearly 5% below their five-year average, the research note said.