Oil prices fell on Tuesday as investors watched for any sign of progress from potential US-Iran talks in Doha, with the ceasefire agreed on 17 June still looking fragile after a fresh exchange of missile strikes earlier in the week.
Brent crude futures for August delivery, which expire today, dropped 1.03% or 75 cents to $72.40 a barrel as of 0038 GMT. The more actively traded September contract fell 0.54% or 40 cents to $73.51. US West Texas Intermediate slipped 0.66% or 47 cents to $70.32.
“Markets are factoring in hopes of a positive outcome from the Doha talks, even though flows through the Strait of Hormuz have not yet returned to normal,” said Tim Waterer, chief market analyst at KCM Trade. “There is cautious optimism, but the market is still hedging its bets until we see more tangible signs of de-escalation.”
The signals from both sides remained contradictory. Iran’s Deputy Foreign Minister Kazem Gharibabadi said on Monday that Iranian and Omani experts would begin talks in the coming days on rerouting shipping through the Strait of Hormuz, and that Iran would seek to prevent vessels from travelling outside designated lanes. But Iranian Foreign Ministry spokesman Esmail Baghaei said there would be no negotiating meetings at any level with the American side in the days ahead.
President Donald Trump, speaking to reporters in the Oval Office, was noncommittal. “The meeting in Doha may be important, maybe not. We’ll see,” he said.
The uncertainty puts a spotlight on the ceasefire deal’s fragility. The agreement, struck to end four months of conflict that disrupted global oil flows through Hormuz and posed a political challenge for Trump ahead of November’s congressional elections, has yet to translate into a full resumption of normal shipping. Israel has not joined the US-Iran peace talks and has distanced itself from the arrangement.
Despite renewed attacks on vessels in the strait, shipping data showed Middle East producers continuing to load oil and liquefied natural gas. Goldman Sachs analysts, in a note dated 29 June, estimated that if Gulf flows continued recovering at the average pace seen over the past two weeks, they could return to pre-war levels of 23 million barrels per day by early July.
