Oil prices slid about 3 per cent to a seven-week low on Tuesday after US Energy Secretary Chris Wright said he is seeing an increasing amount of traffic through the Strait of Hormuz.
“I would say rising very meaningfully,” Mr Wright told an energy conference in Washington when asked where exports stood compared to recent weeks.
He did not provide figures on how many ships were passing through the key waterway through which about 20 per cent of the world's oil and gas supplies flowed before the regional conflict broke out on February 28. The International Monetary Fund's Port Watch showed vessel traffic through the strait was still minimal.
Asked if oil exports from the Gulf industry are rising, Mr Wright said: “That's a fair statement. That is a fair statement, and will continue to rise."
Brent crude settled 3 per cent lower at $91.45 per barrel. West Texas Intermediate, the gauge for US crude, slid 310 per cent to settle at $88.20 a barrel.
Mr Wright's comments come as Washington and Tehran struggle to agree to an enduring ceasefire on the war.
“I think things are actually trending in a very positive direction,” he said, while accusing Iran of “economic terrorism” for effectively shutting down the strait.
“They're going to get to play that card once, and they played it. This will not happen again,” he said.
Mr Wright also said it would take months after the war before normal energy flows are restored.
On Monday, Israel and Iran stopped direct attacks on each other after President Donald Trump urged them stop. At the same time, both sides exchanged threats to escalate tension.
“Oil pulled back after Iran and Israel ended attacks in a wary settlement for now,” John Canavan, lead US analyst at Oxford Economics, wrote in a note to clients.
Israel's military also launched attacks on the Lebanese port city of Tyre, killing at least nine and injuring dozens. Iran has so far withheld from striking Israel back.
US-mediated talks between Israel and the Lebanese government were scheduled to resume on June 22.
