Oil prices fell Wednesday after President Donald Trump said U.S. talks with Iran in Qatar are going well.
Brent crude futures, the international benchmark, traded 1.1% lower at $72.12 per barrel by 10:01 a.m. ET. The contract dropped roughly 21% last month, notching its largest monthly decline since March 2020.
U.S. West Texas Intermediate futures fell 0.66% to $69.04. The contract dropped more than 20% in June, reflecting its worst monthly performance since late 2021.
“As far as things are going, the denuclearization of Iran is moving along well” Trump told reporters. “They’ve had very good meetings and we’ll see.”
Trump’s son-in-law Jared Kushner and U.S. special envoy Steve Witkoff arrived in Doha, Qatar on Tuesday for indirect talks with Iran. The U.S. envoys are speaking with mediators and not directly with the Iranians, a Qatari government spokesperson said.
The talks in Qatar come after renewed fighting between the U.S. and Iran over the weekend jeopardized a 60-day truce between the two countries. Tehran fired on two commercial ships and the U.S. struck targets in Iran in retaliation.
The U.S. and Iran struck a 14-point memorandum of understanding on June 17 to pause fighting that had disrupted global oil flows through the strategically vital Strait of Hormuz.
Located in the Persian Gulf between Oman and Iran, the Strait of Hormuz is one of the world’s most critical energy choke points. The narrow waterway typically handles around 20% of the world’s oil traffic.
Iranian state media reported Wednesday that a ship ran aground in the Strait of Hormuz while using a route that was not approved by Tehran. The Islamic Republic identified the vessel as a foreign container ship, without providing further details.
Strait of Hormuz traffic
The oil market continues to take an optimistic view on a supply recovery in the Middle East despite recent flare-ups between the U.S. and Iran, said ING strategists Warren Patterson and Ewa Manthey.
They said in a research note published Wednesday that tanker vessel movements in the strategically vital Strait of Hormuz still appear limited.
“Admittedly, there has been a slight pickup in inbound tanker traffic, suggesting that shipowners are becoming increasingly confident about moving vessels into the Persian Gulf,” Patterson and Manthey said.
“If this trend accelerates, it becomes a clear headwind—and potentially a direct challenge—to our view that oil prices should rise from current levels,” they added.
By CNBC