Oil prices experienced a decline on Tuesday, as soft demand in Asia and ongoing cease-fire negotiations in the Middle East weighed on market sentiment. U.S. crude oil futures fell to approximately $74 per barrel, following a sell-off in the previous session fueled by concerns over demand in Asia and geopolitical tensions in the region.

According to Francisco Blanch, a commodity strategist at Bank of America, the current decline in oil prices can be attributed to a combination of increased supply and weaker demand. Blanch stated that the market is closely following supply and demand fundamentals, with China's slowdown playing a significant role in the current air pocket affecting prices.

Reportedly, both U.S. crude and Brent prices have experienced a 9.2% decline in the quarter thus far as the market grapples with these factors. At Tuesday's closing, the West Texas Intermediate September contract settled at $74.04 per barrel, representing a decrease of 33 cents or 0.44%. Year to date, U.S. crude oil has gained 3.2%. Meanwhile, the Brent October contract closed at $77.20 per barrel, down 46 cents or 0.59%. Year to date, the global benchmark remains nearly flat, with a marginal increase of just 0.2%.

In the midst of these developments, U.S. Secretary of State Antony Blinken is currently in the Middle East, striving to broker a cease-fire agreement in Gaza and secure the release of hostages held by Hamas. Blinken announced that Israeli Prime Minister Benjamin Netanyahu had accepted a bridging proposal, urging Hamas to do the same. However, Hamas leader Yahya Sinwar reportedly sees these negotiations as an attempt to give Israel more time to wage war, according to Arab mediators cited by The Wall Street Journal. Sinwar allegedly plans to exert pressure on Israel through launching attacks from the West Bank, according to these sources. On Sunday, Hamas claimed responsibility for a suicide bombing in Tel Aviv that left a bystander injured.

Interestingly, tensions between Iran and Israel have had an impact on oil prices. Despite the assassination of a Hamas leader in Tehran in late July, Iran has refrained from retaliating against Israel. This restraint has contributed to a pullback in oil prices. The United States hopes that a successful cease-fire deal in Gaza can prevent a wider conflict in the region. Nevertheless, experts warn that the market may be underestimating the geopolitical risks that persist.

Amena Bakr, Senior Researcher at Energy Intel, highlighted that the market's assumption of diminished geopolitical risk may be premature. In an interview with CNBC's "Capital Connection," Bakr emphasized that ongoing tensions in the region could still impact oil prices and the broader market.

As the oil industry closely monitors developments in both the Asian demand outlook and the cease-fire negotiations, uncertainties in the market persist. It remains to be seen how these factors will continue to shape oil prices and international dynamics in the coming days.