Oil Prices Fall as Iran-Oman Talks Boost Hopes for Strait of Hormuz Deal

Oil Prices Slip as Iran-Oman Talks Raise Hopes for Strait of Hormuz Shipping Deal

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Oil Prices Slip as Iran-Oman Talks Raise Hopes for Strait of Hormuz Shipping Deal

Oil prices edged lower on Thursday as investors reacted to signs of progress in talks between Iran and Oman over shipping through the Strait of Hormuz, while continuing to monitor broader negotiations between the United States and Iran.

Brent crude futures fell 33 cents, or 0.42%, to $79.12 per barrel, while U.S. West Texas Intermediate (WTI) crude declined 42 cents, or 0.56%, to $74.80 per barrel during early trading. Brent had closed slightly higher in the previous session, while WTI ended marginally lower.

Market sentiment remained cautious as traders assessed whether diplomatic progress could lead to the restoration of normal energy flows through one of the world’s most strategically important oil shipping routes.

Strait of Hormuz Talks Influence Market Sentiment

Iran’s Foreign Ministry spokesperson, Esmaeil Baghaei, said Iran and Oman had reached an understanding on the geographic coordinates for a shipping route through the Strait of Hormuz. According to him, a joint announcement is being finalised, provided there is no interference from third parties.

The reported progress has fuelled expectations that shipping through the waterway could gradually resume under more stable conditions, easing concerns that have disrupted global energy markets in recent months.

Analysts at ING noted that the direction of U.S.-Iran negotiations remains the key factor for the oil market, saying meaningful progress would be necessary before energy exports through the region can fully recover.

Security Risks Continue to Weigh on Prices

Despite the diplomatic developments, security concerns in the Middle East continue to limit optimism.

Iran has reportedly warned Gulf states that any future U.S. military action against its territory could trigger retaliatory attacks on critical energy infrastructure across the region.

Adding to the uncertainty, Yemen’s Iran-aligned Houthi movement claimed responsibility for missile attacks targeting two Saudi oil tankers near Yanbu on the Red Sea and in the Gulf of Aden. Saudi authorities had not confirmed the reported attacks at the time of publication.

Analysts say continued threats to commercial shipping in the Red Sea and surrounding waters remain a significant risk to global oil supplies.

U.S. Stockpiles Add to Market Pressure

Oil prices also came under pressure after the U.S. Energy Information Administration reported an increase in crude oil inventories. The rise was attributed to slightly lower refinery activity and higher crude imports.

Higher stockpiles generally signal weaker demand or increased supply, factors that can weigh on crude prices.

Meanwhile, Reuters reported that a proposed arrangement involving Iran and Oman could give Tehran greater oversight of vessels entering the Gulf through the Strait of Hormuz. While U.S. President Donald Trump has said a deal to reopen the waterway is close, U.S. officials have maintained that they would not support any agreement granting Iran control over access to one of the world’s most important energy trade routes.

Investors are expected to remain focused on further diplomatic developments, as any breakthrough—or setback—in U.S.-Iran negotiations could have a significant impact on global oil prices and energy markets.