Global oil prices rebounded on Tuesday, recovering from steep losses in the previous session as concerns over potential supply disruptions in the Middle East resurfaced amid continued uncertainty surrounding diplomatic efforts between the United States and Iran.

Brent crude futures rose 1.3% to $84.89 per barrel, while US West Texas Intermediate (WTI) crude gained 1% to $81.11 per barrel, recovering part of Monday's sharp decline that had pushed both benchmarks to multi-week lows.

The market had weakened after US President Donald Trump indicated that Washington was delaying further military action against Iran while allowing diplomatic efforts to continue. However, optimism faded after Iran denied that negotiations with the United States were underway, renewing concerns that regional tensions could escalate further.

Investor attention remains focused on the Strait of Hormuz, a critical global energy corridor through which around 20% of the world's crude oil and liquefied natural gas shipments typically pass. Continued uncertainty over shipping security in the region has kept a geopolitical risk premium embedded in oil prices.

Market participants are also monitoring developments in the Red Sea, where security concerns have prompted some oil tankers to alter their routes, increasing shipping costs and transit times. Meanwhile, a cargo vessel near Oman's Al Khasab reported being struck by an unidentified projectile, underscoring the persistent security risks facing maritime traffic in the region.

Analysts said the combination of unresolved geopolitical tensions, uncertain diplomatic prospects and ongoing risks to key shipping routes is likely to keep oil markets volatile, with supply concerns continuing to support prices despite recent fluctuations.