Global oil prices extended their decline on Tuesday after Qatar announced progress in mediation efforts aimed at ending the conflict between the United States and Iran, raising expectations of improved energy flows through the Strait of Hormuz.

Brent crude fell by more than 5%, reaching its lowest level in nearly three weeks, as investors responded positively to renewed diplomatic optimism. The decline followed sharp losses in the previous session, with markets increasingly pricing in the possibility of a negotiated settlement that could ease disruptions to global oil supplies.

According to Qatar's Emiri Office, US President Donald Trump and Qatar's Emir Sheikh Tamim bin Hamad Al Thani discussed efforts to bridge differences between Washington and Tehran during a phone conversation. The Emir emphasized the importance of dialogue and adherence to the US-Iran Memorandum of Understanding signed in mid-June, which called for an immediate halt to military operations.

Despite President Trump's statement that negotiations with Iran had already begun, Tehran denied that formal talks were taking place. However, Iran confirmed that discussions with Oman regarding shipping arrangements through the Strait of Hormuz remain constructive and are focused on establishing secure maritime transit while safeguarding the sovereignty and security interests of both countries.

Senior US officials also expressed optimism over diplomatic progress. Treasury Secretary Scott Bessent said an agreement to reopen the Strait of Hormuz could be reached within days, while Secretary of State Marco Rubio stated that negotiations had advanced, although a final agreement had yet to be concluded.

Qatar's Foreign Ministry said mediators, including Qatar, Pakistan and Oman, continue coordinating efforts to facilitate dialogue and exchange proposals between Washington and Tehran. Pakistani officials also reaffirmed their support for launching direct negotiations between the two sides.

Despite the diplomatic progress, shipping risks remain elevated. Commercial traffic through the Strait of Hormuz continues to face severe disruptions, while security incidents involving merchant vessels have underscored the fragile situation in the region. Market participants remain closely focused on further developments, as any breakthrough or renewed escalation could significantly influence global energy prices and supply chains.