Oil drops to more than two-week low on Iran-Oman talks to reopen Strait of Hormuz

"It's renewed focus on the discussion between Iran and Oman regarding a deal for transiting oil and other petrochemicals through the Strait of Hormuz. So that sort of creates some optimism," said Bjarne Schieldrop, chief analyst, commodities, at SEB Research.

Iran has held new talks with neighbouring Oman on management of the Strait of Hormuz, blockaded over nearly six months of conflict, with Oman's foreign minister saying he was hopeful a temporary corridor through the waterway could be announced soon.

The two countries have held intermittent discussions for weeks about oversight of the vital waterway, which carried about a fifth of global oil and liquefied natural gas shipments before the U.S.-Israeli war with Iran began in February.

The two countries said on Tuesday that they discussed "a joint temporary navigational corridor" through the strait and agreed to clear it of mines.