CFOTO/Future Publishing via Getty ImagesOil prices have fallen sharply in early trade in Asia after US President Donald Trump said negotiations to end the war are in progress - a claim disputed by Iranian officials.
Brent crude fell by 6.6% to $97.56 (£72.65) a barrel, while US-traded oil fell by more than 5.5% to $87.20.
Trump said on Tuesday that talks to end the war are happening "now" and that the people the US were in discussions with "want to make a deal so badly".
On Monday, official in Tehran said claims of talks between the US and Iran were "fake news", as strikes between Israel and Iran continued to be exchanged.
Trump said Vice President JD Vance and Secretary of State Marco Rubio were involved in the discussions to end the war.
The president added that the US-Israeli strikes on Tehran have led to "regime change", repeating his claim that Iranian leaders have agreed that they will never have a nuclear weapon.
But Tehran has previously rejected claims that it had been in contact with the US, calling it an attempt to manipulate markets.
The price of Brent crude rose back above $100 a barrel on Tuesday and even after the latest falls remains much higher than before the US and Israel launched attacks on Iran on 28 February.
The conflict has triggered a global energy crisis with governments around the world announcing measures in recent weeks aimed at easing the impact on their economies.
On Tuesday, the boss of energy giant Shell warned that shortages could hit Europe next month.
Wael Sawan, chief executive of Shell, told an energy industry conference in Houston: "South Asia was first to get that brunt. That's moved to South East Asia, North East Asia and then more so into Europe as we get into April."
Oil and gas prices have soared since the war, with Iran effectively blocking the Strait of Hormuz, a narrow waterway which usually sees about 20% of the world's oil and liquefied natural gas pass through each day.
