After crude oil dropped nearly 2% on Monday, prices continued to edge lower on Tuesday as higher exports from the Persian Gulf and a Saudi price cut pointed to looser market supply.

Global benchmark Brent crude slipped below $100 per barrel, while West Texas Intermediate fell to around $88.

Gulf producers are shipping more crude through the Strait of Hormuz, and although risks remain elevated, more tankers are choosing to brave the disputed waterway.

Kuwait said its crude output has recovered to about 75% of pre-Iran war levels, while Iraq is chartering additional vessels to export crude via the Strait of Hormuz.

At the same time, Saudi Aramco cut the official selling price of its flagship Arab Light crude for Asian customers to a six-year low in a bid to defend market share.

Heather Conley, a senior fellow at the American Enterprise Institute and a senior advisor at Evenflow Macro LLC, said improved crude flows through the Strait of Hormuz have not resolved the energy challenge, and refined product supply remains tight.

The U.S.-Iran conflict broke out in February this year, disrupting crude supply and driving up inflation, and Brent crude is still up about 65% year to date.

Although Middle East crude flows are recovering toward pre-conflict levels, the refined products market remains highly stressed, partly because of Ukraine's strikes on Russia.

That has prompted G7 members and their allies to keep releasing strategic reserves.