Oil prices softened on Tuesday, with markets weighing reports of mediation efforts between the US and Iran against an exchange of fresh attacks between the two and threats of a naval blockade of Saudi Arabia by Yemen’s Houthis, Reuters reports.

Brent crude futures eased 78 cents, or 0.9 per cent, to $88.44 per barrel by 0415 GMT. US West Texas Intermediate crude was down 73 cents, or 0.9pc, to $82.50 per barrel, while the more active contract for September delivery slipped 41 cents, or 0.5pc, to $82.07 a barrel.

“There’s some hope of de-escalation between the US and Iran. Reports are that mediators are proposing a 10-day ceasefire, which could put the memorandum of understanding back on track,” ING analysts said in a note, referring to the June interim deal.