Th prices of oil dropped on Wednesday as US President Donald Trump reiterated that the war with Iran will "end every quickly".
Brent crude oil futures fell 88 cents, or 0.8 per cent, to $110.40 a barrel by 0410 GMT, while US West Texas Intermediate futures were down 67 cents, or 0.6 per cent, to $103.48.
Both benchmark prices fell almost $1 on Tuesday after US Vice President JD Vance said that the US and Iran had made progress in talks, with neither wanting further military action.
However, Trump had earlier stated that the US might have to strike Iran again, adding that he was only an hour away from ordering an attack before postponing it. He asserted the need to strike again a day after he had said he planned to pause hostilities following a new proposal by Tehran to end the war.
The US president also said Iran's leaders are "begging" for a deal and warned of a new US attack in coming days if no agreement was reached.
On Tuesday, Citi had projected oil to touch 120 a barrel in the near future, stating that oil markets are under-pricing the risk of a prolonged supply disruption and broader tail risks.
The global oil crisis arises from the blockage of the Strait of Hormuz, which ships nearly 20 per cent of the world's energy resources.
Some tankers and containers have managed to cross through the Strait though the number of shipments remain below the 130 ships that typically transited before the war.
After more than two months, two Chinese supertankers carrying 4 million barrels of West Asian crude oil exited the Strait of Hormuz on Wednesday.
Countries are relying on commercial and strategic inventories as they grapple with the shortfall in global supplies from the war.
In the US, crude oil inventories fell for a fifth straight week last week, according to market sources citing American Petroleum Institute data released on Tuesday, while fuel stocks also fell.