London: Brent crude oil futures dropped over 3% on Tuesday as signs of a possible diplomatic opening in the Middle East eased supply concerns. The international benchmark was down 3.1% at $106.50 per barrel as of 1950 GMT.

According to Anadolu Agency, oil prices came under pressure after Pakistan's Prime Minister Shehbaz Sharif urged US President Donald Trump to extend his deadline on Iran by two weeks 'to allow diplomacy to run its course.' Sharif also called on Tehran to reopen the Strait of Hormuz for a corresponding two-week period as a goodwill gesture, while urging all warring parties to observe a cease-fire across the region for the same period.

Adding to expectations of a possible diplomatic pause, the White House told Axios that Trump is 'aware' of Pakistan's two-week Iran cease-fire proposal and that 'a response will come.' The developments raised hopes that tensions in the region could ease, weighing on crude prices after recent gains driven by fears of prolonged disruption to energy flows through the Strait of Hormuz.

Pakistan is currently facilitating indirect talks between the US and Iran aimed at ending the Middle East conflict.