Oil Prices fell on Thursday as progress in Iran-Oman talks raised hopes for a diplomatic breakthrough. Investors also awaited signs of a final U.S.-Iran agreement that could reopen the Strait of Hormuz.
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Brent crude futures dropped 33 cents (0.42%) to $79.12 a barrel by 0418 GMT. U.S. West Texas Intermediate (WTI) crude declined 42 cents (0.56%) to $74.80 a barrel.
Brent closed slightly higher on Wednesday. However, WTI finished the previous session with a small loss.
Iran and Oman Advance Shipping Talks
Iran’s Foreign Ministry spokesperson Esmaeil Baghaei said Tehran and Oman had agreed on the geographical coordinates of a proposed shipping route through the Strait of Hormuz.
He added that both countries were preparing a joint announcement. However, he said outside interference could still delay the process.
Nomura Securities economist Yuki Takashima said reports of progress encouraged traders to sell crude, putting fresh pressure on prices.
He also noted that oil prices have returned to levels seen after the interim U.S.-Iran agreement announced in June.
Markets Watch U.S.-Iran Negotiations
Reuters reported that a proposed deal could give Iran greater authority over ships entering the Gulf through the Strait of Hormuz.
However, U.S. officials have not commented on the proposal. President Donald Trump has repeatedly said a deal is close. Even so, Washington continues to oppose Iranian control of the strategic waterway.
ING analysts said meaningful progress in U.S.-Iran talks remains essential. They added that global energy flows cannot fully recover without a lasting agreement.
Regional Risks Continue
Despite diplomatic progress, regional tensions remain high.
Iran has warned Gulf states that any future U.S. military action could trigger retaliation against key energy infrastructure.
Shipping data showed Gulf crude and condensate exports remained about 40% below pre-war levels during July.
Meanwhile, Yemen’s Iran-aligned Houthi movement claimed responsibility for missile attacks on Saudi oil tankers in the Red Sea and the Gulf of Aden.
Saudi Arabia has not confirmed the incidents. Analysts said continued security risks could limit further declines in oil prices.
