Mohsin Naqvi, Pakistan's interior minister, said that "significant progress was made" in talks with Iran aimed at ending the conflict in the Middle East.
Oil prices declined on Tuesday as investors look to talks between Iran and Pakistan aimed at ending the war in the Middle East.
West Texas Intermediate's contract for October delivery (CL.1) (CLV26) fell about 3% to $82.44 a barrel, while Brent crude's October contract (BRN00) (BRNV26) shed just over 3%, slipping to $89.34 a barrel. The moves bring both the U.S. and the international benchmarks down to their lowest levels in almost two weeks and would mark the West Texas Intermediate contract's largest one-day decline in three weeks.
It comes after Mohsin Naqvi, Pakistan's interior minister, said that "significant progress was made" with Iran in discussions hoped to help bring the conflict with the U.S. to a close.
"The Iranian President candidly shared his Government's perspective and concerns, and we had a very constructive exchange on the issues involved," he wrote in a post on X. "We remain hopeful that this momentum will help pave the way for further progress and lasting peace in the region."
It indicates that traders are shrugging off Treasury Secretary Scott Bessent's "Operation Economic Outcast" pledge, which he referred to as an "economic D-Day" for the Islamic Republic on Monday. He warned that any country that engages financially with Iran would face retaliation. Close to 60 entities, individuals and vessels that enable the regime's "recklessness" were sanctioned, the Treasury said in a statement.
Following the threat, Seyed Ali Madanizadeh, Iran's minister of economic affairs and finance, told state television that Tehran had been awaiting these plans "for a long time" and that the government had a two-year plan in place - potentially easing investors' concerns.
"In the absence of material escalation and amid continuing grey flows through the Strait of Hormuz, oil markets remained mostly in a wait-and-see mode," Peter Sidorov of Deutsche Bank wrote in a note on Tuesday.
-Nora Redmond
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