LONDON — Oil prices fell more than 4% on July 24 after reports that China had begun efforts to revive stalled peace talks between the United States and Iran, offering markets some hope that the escalating conflict in the Middle East could be brought under control. Brent crude settled at $96.78 a barrel, down $3.91, or 3.88%, while U.S. West Texas Intermediate crude settled at $89.31, down $2.88, or 3.12%. Despite the daily declines, both benchmarks remained on course for substantial weekly gains as traders continued to assess the effect of the conflict on global energy supplies. Oil prices had risen sharply during the week after the United States and Iran exchanged missile strikes and traffic through the Strait of Hormuz fell significantly. The Strait is one of the world's most important energy shipping routes, carrying large volumes of crude oil and petroleum products from the Gulf to international markets. Any prolonged disruption to the waterway could therefore have major consequences for global energy prices and inflation. The situation was further complicated by attacks on shipping in the Red Sea by Yemen's Houthi movement. The group had declared a naval blockade on Saudi Arabia and threatened shipping in the region as the conflict expanded. Saudi Arabia had already been seeking alternative ways to move some of its oil because of restrictions around the Strait of Hormuz. Although vessel traffic through the strait had fallen sharply, shipping data indicated that some vessels were still moving through the waterway. Analysts therefore described the situation as a serious disruption rather than a complete blockade. The possibility of renewed negotiations between Washington and Tehran nevertheless provided some relief to energy markets. China was reported to be pushing for the resumption of peace talks, raising hopes that diplomatic efforts could prevent further military escalation. Investors responded by reducing some of the risk premium that had been built into oil prices during the week. The potential consequences of the conflict extend beyond the oil market. Higher crude prices can increase transportation and manufacturing costs, raise fuel prices and add to inflationary pressure in countries that depend heavily on imported energy. Developing economies are particularly vulnerable because higher fuel costs can place pressure on foreign-exchange reserves and government finances. Nigeria and other oil-producing countries can benefit from higher crude prices through increased export earnings, but they can also face higher domestic fuel and transportation costs if global prices remain elevated. For major oil-importing economies in Asia and Europe, sustained increases in crude prices could place additional pressure on households and businesses. Energy analysts warned that the market remained vulnerable to further increases if disruptions continued. JPMorgan analysts estimated that each additional month of supply disruption could add roughly $7 to $8 per barrel to Brent crude, potentially pushing monthly average prices toward $114 if the disruption lasted for three months. The figures illustrated the potential scale of the economic consequences if shipping through the region became more severely restricted. Other developments also contributed to uncertainty in global energy markets. Russia reported strikes against Ukrainian ports that damaged infrastructure and fuel reserves, while Kazakhstan temporarily reduced oil production after suspected drone attacks affected its main Black Sea export terminal. The combination of geopolitical conflict, attacks on shipping and disruptions to energy infrastructure created a complicated outlook for traders. Markets therefore remained focused on diplomatic developments as well as military activity. A successful resumption of US-Iran negotiations could reduce fears of a prolonged supply disruption and bring further relief to oil prices. A breakdown in diplomacy, however, could quickly restore the risk premium that had pushed crude above $100 earlier in the week. For consumers and businesses around the world, the outcome of the confrontation will have consequences well beyond the Middle East. Oil remains a fundamental input for transportation, manufacturing and many other economic activities. The July 24 decline therefore provided temporary relief but did not remove the underlying risks facing global energy markets. Traders continued to monitor the Strait of Hormuz, the Red Sea and diplomatic efforts between the United States and Iran as they assessed whether the latest decline in crude prices represented the beginning of a sustained correction or simply a pause in a highly volatile market.