Crude oil prices declined in early Thursday trading after Qatar announced that the United States and Iran had achieved “positive progress” during indirect negotiations that wrapped up Wednesday in Doha.
Brent futures slipped 73 cents, or 1.02%, to $70.84 per barrel as of 0102 GMT. Meanwhile, U.S. West Texas Intermediate crude dropped 83 cents, or 1.21%, settling at $67.75 per barrel. Both benchmarks had already fallen more than 1% in the prior session, reaching their lowest points in four months.
According to sources familiar with the talks, negotiators from both countries spent two days in Doha working through issues related to shipping through the Strait of Hormuz — a critical waterway that handled one-fifth of the world’s oil supply before the war — as well as the release of frozen Iranian assets.
While tanker traffic through the strait has begun to recover, tensions remain high. The two nations exchanged military strikes last weekend following an Iranian attack on a cargo ship. U.S. Vice President JD Vance stated that oil flows through the waterway had returned to pre-war levels, though he did not provide specific figures.
Two senior Iranian sources indicated that Iran is intent on securing international recognition of its authority over the strait, by force if necessary. Tehran has also repeatedly stated it plans to begin collecting tolls on shipping starting in mid-August, once a toll-free grace period established under an earlier agreement runs out.
Market analysts at Haitong Futures noted in a research report that as the strait remains open and oil continues to flow, competition for market share is driving prices lower, with growing concerns about an oversupply situation developing.
Adding further pressure to the market, sources said Wednesday that OPEC+ member nations are expected to agree on another increase in production targets when they convene Sunday. The planned output hike for August is approximately 188,000 barrels per day — matching the same increases applied in June and July.
On the domestic front, the U.S. Energy Information Administration reported Wednesday that crude oil stockpiles dropped by 3.8 million barrels last week to 408.4 million barrels — the lowest level recorded since September 2018. However, that decline fell short of analyst expectations from a Reuters survey, which had projected a draw of 4.5 million barrels.
