Global oil prices saw modest fluctuations on Tuesday as the market carefully weighed conflicting signals about the potential for a US-Iran agreement that could ease shipping traffic through the Strait of Hormuz.

US West Texas Intermediate (WTI) crude futures rose 19 cents to $82.32 per barrel as of 8:01 a.m. Eastern Time, while the international benchmark Brent crude edged up 2 cents to $87.74 per barrel.

Crude prices retreated from session highs following reports that Pakistan's defense minister indicated growing signs the US and Iran were "close to some kind of consensus arrangement."

Earlier in the session, oil had surged as much as 3% after President Donald Trump's demand that Iran pay war reparations to the United States dampened expectations for a navigation agreement.

On Monday, the Trump administration extended the suspension of the Jones Act, which typically requires goods transported between US ports to be carried on American-built, owned, and crewed ships. The revised policy narrowed the exemption, allowing only vessels carrying specific energy commodities to qualify.

This policy adjustment came after official data showed US government crude oil reserves had fallen to their lowest level in more than 40 years.

Meanwhile, traders are parsing a series of contradictory statements from Washington and Tehran. President Donald Trump claimed the United States has "100 percent" control over the Strait of Hormuz.

The issue of reparations has become a new sticking point in negotiations, with both sides now demanding compensation from the other for alleged damages.

Strategists at ING wrote in a research note on Tuesday that "the oil market is currently entirely driven by news flow, resulting in significant price volatility. This brief wave of optimism is quickly fading."

"Based on the current rhetoric from both sides, any potential navigation agreement is still some way off, suggesting the overall risk for oil prices remains tilted to the upside."