- Exports of oil and LNG continued despite tensions in the Strait of Hormuz.
- Markets are eyeing possible talks between the US and Iran in Doha on regional tensions.
- Investors remain cautious despite hopes of easing Gulf tensions.
Oil prices fell on Tuesday and were poised for a monthly decline as investors eyed potential talks between the United States and Iran in Doha amid a strained temporary ceasefire in the four-month-old war.
Brent August crude futures, which expire on Tuesday, fell 0.9%, or 64 cents, to $72.51 a barrel. barrel per 0356 GMT. These levels are about $20, or 22%, lower than last month’s close. The more actively traded September contract fell 0.4%, or 31 cents, to $73.6 a barrel. barrel.
US West Texas Intermediate for August fell 0.6%, or 39 cents, to $70.36 a barrel. Prices are set for a decline of about $17, or 19%, from the May 29 close.
Both Brent and WTI prices are almost back to pre-war levels on 27 February.
“Investors are pricing in hopes for a positive outcome of the Doha negotiations, although real normalization of flows through the Strait of Hormuz is not yet visible,” said Tim Waterer, chief market analyst at KCM Trade.
“The market is cautiously hopeful but still hedging its bets until we see more tangible signs of de-escalation,” Waterer added.
Iranian and Omani experts will begin talks to redefine transit routes through the Strait of Hormuz in the coming days, Iranian Deputy Foreign Minister Kazem Gharibabadi told state television on Monday, adding that his country would try to block ships outside defined paths.
But Iranian Foreign Ministry spokesman Esmaeil Baghaei said there will be no negotiating meetings at any level with the US side in the coming days.
“The Doha meeting might be important, it might not be. We’ll find out,” US President Donald Trump told reporters in the Oval Office.
The uncertainty over whether the two sides would meet highlighted the fragility of a June 17 agreement to halt the fighting that has disrupted global oil flows through the Strait of Hormuz and posed a political challenge to Trump ahead of November’s congressional elections.
With a further emphasis on prices, some analysts were concerned about demand from China.
“We await more evidence of an increase in Chinese purchases, but cannot yet bet on a big return to the market from the world’s largest crude oil importer,” Sparta Commodities head of research Neil Crosby said.
Meanwhile, Middle East producers are pushing ahead with loading oil and LNG despite fresh ship attacks in the Strait of Hormuz and renewed strikes between the United States and Iran in recent days, shipping data showed.
Traffic last week reached its highest level since the conflict began at the end of February.
