NEW YORK: Oil prices fell as the outcome of talks over a US debt deal remained uncertain and Iran unveiled a proposal to achieve a breakthrough in a decade-old standoff over its nuclear program.

Leaders from the US Senate and House stressed they were working to reach a deal before a Thursday deadline to avoid a default on US government borrowing.

Republicans in the US House of Representatives hope to pass their own version of legislation to reopen the federal government that would differ from a plan emerging on Tuesday from Senate negotiations, Republican lawmakers and aides said.

“We’re trying to sort out the effect of the antics in Washington and whether they’re going to have a deal or not,” said John Kilduff, partner at Again Capital in New York.

“The rhetoric is not calming down as much as many of us had hoped.”

Iranian Deputy Foreign Minister Abbas Araqchi said described a meeting in Geneva as “good” and said he thought the proposal “has the capacity to make a breakthrough.”

Analysts noted that it might still take months, if not years, before free-flowing Iranian oil would be back on the world market.

“If you’re selling the market based on Iran, it seems to be a little premature because it’s a long way to go before sanctions are lifted and barrels come back onto the market,” said Andy Lebow, vice president at Jefferies Bache in New York.

Brent crude fell 62 cents to $110.42 a barrel by 1529 GMT, paring losses after earlier losing more than $1 and settling lower the previous two sessions.

US oil fell 32 cents to $102.09 a barrel, after also losing more than $1 earlier in the session.

On Monday, the US held out the prospect of quick relief from sanctions for Iran if Tehran moved swiftly to allay concerns about its program.

The talks that started on Tuesday on Iran’s nuclear development are the first since the election of President Hassan Rouhani, who has tried to improve ties with the West to pave the way for an end to sanctions that have cut Iranian oil exports by more than 1 million barrels per day.

Oil prices could fall around $10 per barrel if Iran resumes full exports, analysts say.

Britain’s Grangemouth refinery began halting work on Monday ahead of a 48-hour strike. In 2008, a strike there interrupted flows of crude through the Forties Pipeline System and shut in production at 70 North Sea fields, pushing up Brent prices.

BP BP.L, which relies on Grangemouth for steam and power for its Kinneil oil processing terminal, said Tuesday it understands there is an intent to keep the Forties oil pipeline operating should the strike proceed, and has advised oil buyers that crude will keep flowing.

“The Grangemouth refinery shutdown is going to end up being somewhat supportive for the market, so it’s a sort of push-pull we’re seeing,” said Kilduff.

Investors will do without oil inventory data from the US government this week for the first time since 1979, as the Energy Information Administration refrains from publishing its weekly report due to a lack of funds.

US commercial crude oil inventories were forecast to have increased by 2.3 million barrels in the week to Oct. 11, a Reuters poll of analysts showed on Monday.

The American Petroleum Institute, an industry group, will release its weekly inventory report on Wednesday.