Oil prices fell on Tuesday, reversing earlier modest gains as investors maintained cautious optimism over a potential end to the Middle East conflict.

Brent crude futures for August dropped 1.57 per cent to $76.68 per barrel, while United States West Texas Intermediate futures for August declined 1.53 per cent to $72.73 per barrel.

Oil prices slipped overnight after reports that the U.S. Treasury issued a 60-day license authorising the production, delivery, and sale of Iranian crude.

The measure allows Iranian oil to be imported into the United States and paid for in dollars, with the authorization set to expire on August 21.

The development raised concerns among analysts that Iran could channel proceeds from increased oil sales into rebuilding its military capabilities.

When asked on Monday whether he could guarantee that would not happen, President Donald Trump declined to provide such assurance.

“Well, they’re not supposed to be doing that, so we’ll see,” Trump said at the White House during an executive order signing event. “They’re supposed to use money to buy food for their people, because right now their people are very hungry, and they’re buying it exclusively from us: corn, soybeans,” he added.

Vice President JD Vance said there has been “great progress” in talks held in Switzerland, even as tensions remained elevated following Iran’s weekend claim that it had closed the Strait of Hormuz.

U.S. Central Command, however, disputed that assertion, stating that the Strait of Hormuz had not been closed.