- Oil and LNG exports continued despite tensions in the Strait of Hormuz.
- Markets are monitoring possible negotiations between the United States and Iran in Doha due to regional tensions.
- Investors remain cautious despite hopes of easing tensions in the Gulf.
Oil prices fell on Tuesday and were poised for a monthly decline as investors eyed possible talks between the United States and Iran in Doha amid a tense interim ceasefire in the four-month-old war.
August Brent crude futures, which expire on Tuesday, were down 0.9%, or 64 cents, at $72.51 a barrel at 0356 GMT. These levels are about $20, or 22%, lower than last month’s close. The September contract, the most actively traded, was down 0.4%, or 31 cents, at $73.6 a barrel.
US West Texas Intermediate for August fell 0.6%, or 39 cents, to $70.36 a barrel. Prices are expected to fall about $17, or 19%, from the May 29 close.
Brent and WTI prices almost returned to pre-war levels on February 27.
“Investors are banking on the hope of a positive outcome from the Doha negotiations, even if a real normalization of flows across the Strait of Hormuz is not yet visible,” said Tim Waterer, chief market analyst at KCM Trade.
“The market is cautiously optimistic, but continues to hedge its bets until we see more tangible signs of de-escalation,” Waterer added.
Iranian and Omani experts will begin discussions on redefining 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 will try to obstruct ships outside the defined routes.”
However, Iranian Foreign Ministry spokesperson Esmaeil Baghaei said there would be no negotiation meetings at any level with the US side in the coming days.
“The Doha meeting may be important, it may not be important. We’ll find out,” US President Donald Trump told reporters in the Oval Office.
Uncertainty over whether the two sides will meet has highlighted the fragility of the June 17 deal to suspend fighting, which disrupted global oil flows through the Strait of Hormuz and posed a political challenge to Trump ahead of November’s congressional elections.
Weighing further on prices, some analysts were concerned about demand from China.
“We expect more evidence of increased Chinese buying, but we can’t yet bet on a significant return to the market from the world’s largest crude importer,” said Neil Crosby, research director at Sparta Commodities.
Meanwhile, Middle Eastern producers continue to load oil and LNG despite new attacks on ships in the Strait of Hormuz and new strikes between the United States and Iran in recent days, according to shipping data.
Last week, traffic reached its highest level since the conflict began in late February.
