Qatar said mediators were making progress in efforts to end the US- Iran war on Tuesday.

Benchmark Brent crude fell more than 4% after the ‌comments from Qatar, extending Monday's steep losses on hopes that an arrangement could soon be reached to restore traffic through the blockaded Strait of Hormuz.

But for now, the strait remained virtually shut, with another ship reportedly coming under attack while trying to cross it.

Qatar's foreign ministry spokesperson Majed al-Ansari said diplomatic contacts had reached "very progressive stages".

He said mediators including Qatar, Pakistan and Oman were coordinating closely to facilitate negotiations and exchange draft proposals between Washington and Tehran.

A senior Pakistani security official said: "A lot is happening in the background ... We are talking to both sides. Our sole goal at this moment is to make both parties at least agree to start talking."

Iran has halted most traffic through Hormuz while Washington maintains a blockade of Iran-related shipping and ports.

Yemen's Iran-aligned Houthis have also imposed a naval blockade on Saudi Arabia in the Red Sea, further restricting oil ‌export routes. —Reuters