Oil prices dropped on Tuesday, reversing the previous session's gains, amid expectations that peace talks between the US and Iran will occur this week, potentially leading to increased supply from the crucial Middle East production area.

Brent crude futures declined 54 cents, or 0.6 per cent, at $94.94 a barrel. West Texas Intermediate for May fell $1.11, or 1.2 per cent, to $88.50. The May contract expires on Tuesday and the more-active June contract was down 76 cents, or 0.9 per cent, at $86.66, The Caspian Post reports, citing foreign media.

Both benchmarks surged on ​Monday, with Brent up 5.6 per cent and WTI up 6.9 per cent, after Iran again shut the Strait of Hormuz, closing the key oil transport artery, and the US seized an ⁠Iranian cargo ship as part of its blockade of the country’s ports.