Oil prices slid on Tuesday as the world watched for any developments from potential negotiations between the United States and Iran in Doha, following a weekend of missile exchanges that strained a shaky ceasefire in a conflict now entering its fifth month.
Brent August crude futures, set to expire Tuesday, dropped 1.03%, or 75 cents, to $72.40 per barrel as of early morning GMT. The more widely traded September Brent contract fell 0.54%, or 40 cents, to $73.51 per barrel. U.S. West Texas Intermediate crude also declined, losing 0.66%, or 47 cents, to settle at $70.32 per barrel.
Tim Waterer, chief market analyst at KCM Trade, explained that traders are factoring in the possibility of a favorable outcome from the Doha discussions. “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,” he said.
Waterer further noted that the market remains cautious. “The market is cautiously hopeful but still hedging its bets until we see more tangible signs of de-escalation,” he added.
On Monday, Iranian Deputy Foreign Minister Kazem Gharibabadi told state television that Iranian and Omani experts would begin discussions in the coming days about redefining shipping routes through the Strait of Hormuz, and that Iran would work to block vessels operating outside those designated paths.
Despite that, Iran’s Foreign Ministry spokesperson Esmaeil Baghaei stated flatly that there would be no negotiation sessions with American officials at any level in the near future.
President Donald Trump offered an uncertain take on the situation when speaking to reporters in the Oval Office. “The meeting in Doha is going to be perhaps important, perhaps not. We’re going to find out,” he said.
The back-and-forth underscored how delicate the June 17 agreement to pause hostilities truly is. That deal has already been shaken by renewed fighting that has disrupted global oil shipments through the Strait of Hormuz and created a political headache for Trump ahead of November’s congressional elections. Israel has not participated in the U.S.-Iran peace process and has kept its distance from the agreement.
Even so, oil and liquefied natural gas producers in the Middle East have continued loading shipments despite fresh attacks on vessels in the strait and recent exchanges of strikes between American and Iranian forces, according to shipping data.
Analysts at Goldman Sachs wrote in a note dated June 29 that if Persian Gulf oil flows keep recovering at the same pace seen over the previous two weeks, output could return to pre-war levels of 23 million barrels per day as soon as early July. Shipping traffic through the region last week reached its highest point since the conflict began at the end of February.
