Oil prices fell about 3% on Tuesday following a US-Iran ceasefire that held despite exchanges of fire between the two sides.
The US military successfully escorted stranded tankers through the Strait of Hormuz, marking a significant development in efforts to reopen the critical waterway.
Analysts say the complex is pulling back after a price leg up during the past week that has seen July Brent futures advance to new four-year high territory.
However, tensions remain high, and the market is likely to remain volatile until further developments are announced.
The Strait of Hormuz connects the Gulf to wider markets and typically carries oil and liquefied natural gas supply equal to about 20% of global demand every day.
This critical waterway has been a major concern for the global energy industry, with many ships and tankers passing through it daily.
The US military's efforts to escort stranded tankers have helped chip away at worst-case supply disruption fears, but further developments are needed to reassure markets.
South Korea is reviewing whether to join the US plan to help ships transit through the Strait of Hormuz, following an explosion and fire on a Korean-operated ship in the waterway.
The market will continue to be closely watched for any signs of improvement or deterioration in tensions between the US and Iran.
The market is breathing a sigh of relief as the ceasefire holds, but tensions remain high.
