Oil Prices Fall Amid Planned Iran-US Talks
Global oil prices weakened on Wednesday (July 1), as market attention focused on the trip of the United States and Iran delegations to Qatar for separate peace talks with mediators. At 4:50 a.m. ET (8:50 a.m. GMT), WTI crude fell 1.2% to US$68.68 per barrel, while Brent fell 1.2% to US$72.12 per barrel.
Market participants are still closely monitoring developments in the Doha negotiations after Iran refused to hold direct talks with a senior US envoy. Tehran stated that any discussions would only be conducted through mediators at the technical level. This stance has cast doubt on the prospects for a quick agreement to transform the two-week ceasefire into a long-term peace process.
Pressure on oil prices also came after crude prices experienced a sharp decline following the Iran conflict. Brent plunged around 38% throughout the second quarter after previously surging around 94% in the first quarter. This decline marked the deepest quarterly correction since the 66% plunge in the first quarter of 2020. On a monthly basis, Brent also fell around 21% in June after a 19% decline in May, as concerns about supply disruptions through the Strait of Hormuz began to ease.
However, geopolitical risks remain a major concern for energy markets. The absence of direct talks between Washington and Tehran has raised uncertainty about how quickly the two countries can resolve key issues within the 60-day negotiation framework, including the future of the Strait of Hormuz. This strategic waterway remains crucial as it plays a major role in global oil and gas trade flows.
Meanwhile, shipping activity in the Strait of Hormuz is starting to show signs of recovery. Kpler data shows that around 24 commodity vessels, including crude oil and LNG tankers, passed through the waterway on Monday, with traffic remaining stable through Tuesday. This recovery in shipping has helped ease some supply concerns, but the market is still awaiting political certainty from the US-Iran talks in Qatar.
Source: Newsmaker.id
