Oil prices fell nearly 1 percent after Israel and Iran suspended air strikes against each other following an appeal by US President Donald Trump.
US West Texas Intermediate fell 1.3 percent to $90.13 a barrel at 06:00 GMT, while Brent crude futures declined 1 percent to $94.38 a barrel.
Oil prices rose more than 4 percent on Monday after Israel and Iran renewed attacks, jeopardising the possibility of a peace deal and a reopening of the Strait of Hormuz.
“While there is some relief from the latest pause in direct strikes, investors are not convinced the truce will hold,” Tim Waterer, chief market analyst at KCM Trade, told Reuters.
The market is pricing in continued uncertainty rather than a lasting resolution, Waterer said.
Iran and Israel have, however, warned they would retaliate if any party violates the agreement.
Trump asked Israeli Prime Minister Benjamin Netanyahu not to retaliate, to avoid “blowing up” the deal he is negotiating with Iran, Axios reported.
On social media Trump said Israel and Iran both wanted “an immediate CEASEFIRE! Final negotiations on ‘Peace’ are proceeding, subject to ignorance or stupidity getting in its way.”
On Monday, US forces disabled an unladen oil tanker in the Gulf of Oman after the vessel violated the ongoing blockade against Iran, US Central Command said in a social media post.
US forces have disabled seven non-compliant vessels, redirected 134 ships that complied, and allowed 42 vessels supporting humanitarian aid to pass since initiating the blockade on April 13, the post said.
Dubai’s main share index declined 0.6 percent, while Abu Dhabi’s benchmark dropped 1.4 percent on Monday.
Saudi Arabia’s stock exchange edged up 0.4 percent, supported by Saudi National Bank and Aramco.