US-Iran war: Oil prices eased on Thursday as investors weighed the possibility that ongoing Iran-Oman negotiations could lead to a US-Iran peace agreement, potentially bringing an end to the five-month conflict and allowing the reopening of the Strait of Hormuz.
Brent crude futures slipped 37 cents, or 0.5%, to $79.08 a barrel, while US West Texas Intermediate (WTI) crude futures fell 53 cents, or 0.7%, to $74.69 a barrel. In the previous session, Brent posted a marginal gain, whereas WTI settled slightly lower.
What’s weighing on crude oil prices?
Investor sentiment remained cautious amid fresh geopolitical developments in the Middle East. According to a Reuters report, a proposed agreement involving Iran and Oman to ease the US-Iran conflict could allow Tehran to oversee ships transiting the Strait of Hormuz, marking a significant concession if implemented.
While US President Donald Trump said a deal to reopen the key shipping route was close, US officials have maintained that Washington would not support Iran controlling access to the strategically important energy corridor.
Meanwhile, Iran reportedly warned Gulf nations that any renewed US military action against its territory would prompt retaliation targeting critical energy infrastructure across the region. Adding to supply concerns, Yemen’s Iran-backed Houthi rebels claimed responsibility for missile attacks on Saudi oil tankers near Yanbu in the Red Sea and in the Gulf of Aden, although Saudi authorities had not confirmed the incidents.
Market participants also remained wary that continued Houthi attacks could prolong shipping disruptions in the Red Sea, limiting optimism over a full recovery in Middle East trade routes.
On the supply front, US crude oil inventories unexpectedly increased last week. Data from the US Energy Information Administration (EIA) showed crude stockpiles rose by 2.5 million barrels to 407 million barrels in the week ended July 31, against analysts’ expectations of a 1.5 million-barrel decline, reflecting slightly lower refinery activity and higher crude imports.
Disclaimer: This story is for educational purposes only. Please consult with an investment advisor before making any investment decisions.
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