WTI fell sharply on hopes for a Hormuz reopening, but shipping flows, Asian imports and U.S. fuel inventories still point to a tighter physical market than prices imply.

"It seems crude is now beginning to price in a sooner rather than later peace deal."

Oil prices fell as Iran-Oman talks raised hopes of a Strait of Hormuz reopening. Brent and WTI crude dropped as supply fears eased.