Global oil prices edged lower on Thursday as investors assessed the progress of Iran-Oman negotiations, which could pave the way for a broader US-Iran peace agreement and the possible reopening of the Strait of Hormuz.
Brent crude futures fell by 37 cents, or 0.5%, to $79.08 per barrel, while US West Texas Intermediate (WTI) crude declined by 53 cents, or 0.7%, to $74.69 per barrel during early trading. Brent had closed slightly higher in the previous session, while WTI ended marginally lower.
Market analysts said the decline followed reports that negotiations between Iran and Oman were moving forward, raising hopes that diplomatic efforts could help ease tensions in the Middle East. Investors are closely watching whether the talks could lead to a broader agreement between Washington and Tehran after months of conflict.
According to media reports, a proposed arrangement between Iran and Oman could allow Tehran to oversee ships entering the Gulf through the Strait of Hormuz. However, there has been no official confirmation from the United States, and US officials have previously stated they would not support any arrangement that gives Iran control over one of the world’s most important energy shipping routes.
Despite optimism surrounding diplomacy, regional tensions continue to weigh on oil markets. Iran has warned Gulf countries that any future US military action could trigger retaliation against key energy infrastructure across the region, while Yemen’s Houthi movement claimed responsibility for missile attacks targeting Saudi oil tankers. Saudi authorities have not officially confirmed the reported incidents.
Analysts said concerns over potential disruptions to Red Sea shipping continue to support oil prices, limiting the impact of the recent diplomatic developments on the market.
Meanwhile, fresh data from the US Energy Information Administration showed that American crude oil inventories increased by 2.5 million barrels during the week ending July 31, reaching 407 million barrels. The rise surprised markets, as analysts had expected a decline of 1.5 million barrels, adding further downward pressure on oil prices.
Investors are expected to continue monitoring developments in the Iran-Oman negotiations, US-Iran diplomacy, and regional security, as these factors remain key drivers of global energy markets.
Also read: Oil Climbs 2% as US-Iran Tensions Intensify
