Oil prices fell on Tuesday as investors weighed the prospects of possible U.S.-Iran talks in Doha while monitoring the fragile ceasefire that has ended four months of conflict but continues to face intermittent violations.
Brent crude futures for August delivery, which expire on Tuesday, fell 75 cents, or 1.03 percent, to US$72.40 a barrel by 0038 GMT. The more actively traded September contract declined 40 cents, or 0.54 percent, to US$73.51 a barrel.
U.S. West Texas Intermediate (WTI) crude dropped 47 cents, or 0.66 percent, to US$70.32 a barrel.
The market remained focused on whether Washington and Tehran would hold talks in Doha, with investors hoping diplomatic progress could ease tensions around the Strait of Hormuz, a critical shipping route for global oil supplies.
“Investors are pricing in hopes of a positive outcome from the Doha talks, even though real normalisation of flows through the Strait of Hormuz is not yet visible,” said Tim Waterer, chief market analyst at KCM Trade.
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“The market is cautiously hopeful but still hedging its bets until we see more tangible signs of de-escalation,” he added.
Iranian Deputy Foreign Minister Kazem Gharibabadi said on Monday that Iranian and Omani experts would soon begin discussions on redefining shipping routes through the Strait of Hormuz. He added that Iran would seek to prevent vessels from travelling outside designated transit lanes.
However, Iran’s Foreign Ministry spokesman Esmaeil Baghaei dismissed expectations of imminent negotiations, saying there would be no meetings with U.S. officials “at any level” in the coming days.
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U.S. President Donald Trump also struck a cautious tone when asked about the reported talks.
“The meeting in Doha is going to be perhaps important, perhaps not. We’re going to find out,” Trump told reporters in the Oval Office.
The conflicting statements underscored uncertainty surrounding the June 17 ceasefire agreement, which halted months of hostilities that disrupted oil shipments through the Strait of Hormuz and rattled global energy markets.
Israel has not joined the U.S.-Iran negotiations and has distanced itself from the ceasefire arrangement.
Despite renewed missile exchanges over the weekend and fresh security concerns in the Gulf, energy exports have continued.
Shipping data showed Middle Eastern producers were pressing ahead with oil and liquefied natural gas (LNG) loadings despite recent attacks on commercial vessels in the Strait of Hormuz and renewed military strikes involving the United States and Iran.
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Analysts at Goldman Sachs said Gulf oil exports were steadily recovering.
“Assuming Persian Gulf flows continue to recover at the same average pace as over the last two weeks, Gulf flows could return to pre-war levels of 23 million barrels per day already by early July,” the bank said in a note dated June 29.
The gradual recovery in oil flows has helped ease immediate supply concerns, although traders remain alert to geopolitical developments that could quickly disrupt one of the world’s most strategically important energy corridors.
