Global oil prices fell for a third consecutive session on Thursday as signs of progress in indirect talks between the United States and Iran over the Strait of Hormuz eased concerns about disruptions to crude supplies.
Brent crude futures dropped 77 cents, or 1.1 per cent, to $70.80 per barrel, while U.S. West Texas Intermediate (WTI) crude declined 84 cents, or 1.2 per cent, to $67.74 per barrel in early trading.
The latest losses followed declines of more than one per cent in the previous session, with both benchmarks slipping to their lowest levels in four months.
Market sentiment improved after Qatar disclosed that Washington and Tehran had made progress in their indirect negotiations centred on the Strait of Hormuz, a key global shipping route through which roughly one-fifth of the world’s crude oil is transported.
Adding to expectations of stronger supply, OPEC+ is widely expected to approve another increase in oil production targets for August when the alliance meets on Sunday, according to sources cited by Reuters.
A Bloomberg report also indicated that crude shipments through the Strait of Hormuz had climbed above 10 million barrels per day, suggesting that exports are recovering despite recent tensions in the region.
However, analysts cautioned that lower oil prices do not necessarily signal the end of inflationary pressures.
Charu Chanana, an analyst at Saxo Markets, said investors should avoid assuming that weaker crude prices would automatically bring inflation under control.
She noted that wage growth, services inflation, tariffs, supply-chain adjustments and government spending could continue to keep inflation above the U.S. Federal Reserve’s target, even as energy prices retreat.
Chanana also warned that oil could quickly regain its geopolitical risk premium if the fragile ceasefire collapses, nuclear negotiations break down, delays emerge over the reopening of the Strait of Hormuz, or wider regional tensions escalate again.
