Brent crude, the international benchmark, increased by 1.6% to reach $101.5 per barrel, while US benchmark WTI rose 2.7% to $90.5 per barrel.

Brent had surged above $114 a barrel earlier on Monday before dropping to settle at $99.94 after US President Donald Trump said there had been “very good and productive conversations” with Iran about ending the war.

Iran has denied holding any talks with Washington. However, sources have indicated that mediation efforts are underway, with countries such as Turkey and Egypt involved in diplomatic attempts to ease tensions.

Global stock markets showed mixed performance on Tuesday as investors weighed hopes for a potential resolution against reports of overnight attacks. Asian markets recovered some of Monday’s losses, with indexes closing higher in Seoul, Tokyo and Hong Kong.

In Europe, major markets in London, Frankfurt and Paris were largely flat in morning trading after gains the previous day. US futures also remained steady.

Neil Wilson, a strategist at investment platform Saxo, said the optimism seen earlier had quickly faded.

“The peak optimism from yesterday didn’t last long and has not really followed through today,” he said.