Oil prices eased in Wednesday trade in Asia as Donald Trump announced he is pausing "Operation Freedom" to seek talks to end the war.
Both the US and Iran made claims and counter-claims about exchanging fire as America attempted to guide neutral vessels safely through the Strait of Hormuz.
But the US president has now indicated will pause that operation, dubbed Operation Freedom, to see if a deal can be reached.
The BBC reports Brent, the global benchmark for crude, fell by 1.7% to $108 (£79.56) a barrel, while US-traded oil fell by 1.6% to $100.60.
Oil prices had risen more than 6% earlier this week as fighting intensified but have since eased.
Trump posted on social media on Tuesday announcing that Project Freedom would be "paused for a short period of time to see whether or not the Agreement can be finalized and signed".
He added that "Great Progress has been made toward a Complete and Final Agreement with Representatives of Iran".