Oil Prices Ease as Iran-Oman Talks Raise Hopes for Hormuz Shipping Breakthrough

Oil prices edged lower on Thursday as investors reacted to signs of progress in negotiations involving Iran and Oman, while continuing to monitor efforts aimed at easing tensions in the Middle East and reopening the Strait of Hormuz, one of the world’s most important energy shipping routes.

Brent crude futures fell 33 cents, or 0.42%, to $79.12 a barrel in early trading, while US West Texas Intermediate (WTI) crude declined 42 cents, or 0.56%, to $74.80 a barrel. Brent had posted a slight gain in the previous session, while WTI ended Wednesday marginally lower.

Market sentiment improved after Iran’s Foreign Ministry said Tehran and Oman had reached an understanding on the geographic coordinates for a shipping route through the Strait of Hormuz. Foreign Ministry spokesperson Esmaeil Baghaei said a joint announcement was being prepared, provided outside parties did not interfere with the process.

The development has raised hopes that commercial shipping through the strategic waterway could resume more smoothly after months of disruption linked to regional conflict.

Yuki Takashima, an economist at Nomura Securities, said reports of progress in the talks had prompted fresh selling in the oil market.

He noted that crude prices have largely returned to the levels seen after the United States and Iran reached an interim peace agreement on June 17, adding that investors are now focused on whether negotiations can produce a lasting settlement.

Despite the optimism, uncertainty remains over the proposed arrangements. Sources familiar with the discussions told Reuters that a draft agreement between Iran and Oman could give Tehran greater authority over vessels entering the Gulf through the Strait of Hormuz. Such a move would represent a significant shift in regional maritime security arrangements.

There has been no immediate response from Washington. While President Donald Trump has repeatedly said an agreement to reopen the strait is close, US officials have maintained that they would not support any arrangement granting Iran control over access to the critical energy corridor.

Analysts say the future direction of oil prices will depend heavily on progress in US-Iran negotiations. ING said in a market note that meaningful diplomatic advances would be necessary before normal energy flows through the region could fully resume.

Shipping data showed Gulf exports of crude oil and condensate remained broadly stable during July but were still about 40% below levels recorded before the conflict began.

Fresh security concerns also continued to weigh on the market. Yemen’s Iran-aligned Houthi movement claimed responsibility for missile attacks targeting Saudi oil tankers near the Red Sea port of Yanbu and in the Gulf of Aden. Saudi authorities had not confirmed the reported attacks.

Takashima said the threat to shipping in the Red Sea continued to limit confidence that regional trade routes would quickly return to normal.

Separately, data released by the US Energy Information Administration showed US crude oil inventories increased during the past week as refinery activity eased slightly and imports rose, adding another factor that contributed to softer oil prices.