Oil prices declined on Tuesday as investors awaited the outcome of possible talks between the United States and Iran in Doha, following an exchange of missile attacks over the weekend that tested a temporary ceasefire aimed at ending a four-month-long conflict.
August Brent crude futures, which expire on Tuesday, fell by 75 cents, or 1.03%, to $72.40 per barrel as of 00:38 GMT. The more actively traded September contract dropped by 40 cents, or 0.54%, to $73.51 per barrel.
U.S. West Texas Intermediate (WTI) crude fell by 47 cents, or 0.66%, to $70.32 per barrel.
Tim Waterer, Chief Market Analyst at KCM Trade, said investors are maintaining hopes for a positive outcome from the Doha discussions, although shipping flows through the Strait of Hormuz have not yet fully returned to normal.
“Markets remain cautiously optimistic, but traders are still hedging their positions until they see more concrete signs of de-escalation,” Waterer said.
Iranian Deputy Foreign Minister Kazem Gharibabadi told state television on Monday that Iranian and Omani experts would begin discussions in the coming days on redefining shipping routes through the Strait of Hormuz. He added that Iran would seek to prevent vessels from traveling outside designated corridors.
However, Iranian Foreign Ministry spokesperson Esmaeil Baghaei stated that no negotiations with the United States at any level were planned in the coming days.
Speaking to reporters in the Oval Office, U.S. President Donald Trump said, “The meeting in Doha may be important, or it may not be. We’ll see.”
The uncertainty surrounding whether the talks will take place has highlighted the fragility of the June 17 agreement designed to halt hostilities that disrupted global oil flows through the Strait of Hormuz and posed a political challenge for Trump ahead of congressional elections in November.
Israel has not joined the U.S.-Iran peace discussions and has distanced itself from the agreement.
Meanwhile, shipping data showed that Middle Eastern producers continue loading oil and liquefied natural gas despite recent attacks on vessels in the Strait of Hormuz and renewed clashes between the United States and Iran in recent days.
Analysts at Goldman Sachs wrote in a note dated June 29: “Assuming Gulf shipping flows continue recovering at the average pace seen over the past two weeks, exports could return to their pre-war level of 23 million barrels per day by early July.”
Shipping activity last week reached its highest level since the conflict began in late February.
Reuters
