Oil Drops for Third Day as US-Iran Talks Ease Supply Fears
News Desk
London.Oil prices fell for a third consecutive session on Thursday as signs of progress in indirect talks between the United States and Iran eased concerns over disruptions to oil supplies through the strategic Strait of Hormuz.
Brent crude futures dropped 77 cents, or 1.1%, to $70.80 a barrel by 0256 GMT, while US West Texas Intermediate (WTI) crude fell 84 cents, or 1.2%, to $67.74 a barrel. Both benchmarks had already declined more than 1% on Wednesday, reaching their lowest levels in four months.
The decline followed Qatar’s announcement that indirect negotiations between Washington and Tehran in Doha had made “positive progress” on issues related to the memorandum that ended hostilities in June. However, officials indicated there had been no significant breakthrough toward a permanent peace agreement.
Market sentiment was further pressured by expectations that the Strait of Hormuz, a vital shipping route that previously handled around one-fifth of global oil supplies before the conflict, will remain open, reducing fears of supply disruptions.
Analysts at Haitong Futures said the continued flow of crude through the waterway has increased expectations of oversupply, while competition among major producers is adding downward pressure on prices.
Adding to the bearish outlook, OPEC+ producers are widely expected to approve another increase in production targets for August when the group meets on Sunday, according to industry sources.
Meanwhile, UBS revised its oil price outlook lower, citing the US-Iran memorandum of understanding and the recovery in oil shipments through the Strait of Hormuz. The bank reduced its average Brent forecast for the September quarter by $25 per barrel and for the December quarter by $10.
UBS now expects Brent crude to average $80 per barrel in the second half of 2026 and $75 per barrel in 2027. However, the bank cautioned that risks remain, noting that tanker traffic entering the Persian Gulf continues to lag behind outbound shipments, suggesting the market has not yet fully normalized.
Qatar’s Foreign Ministry said the next round of indirect US-Iran talks is expected to take place after the funeral ceremonies for Iran’s late Supreme Leader Ayatollah Ali Khamenei on July 9.
Additional input from Geo News Website.
