Oil prices declined on Thursday after the conclusion of indirect discussions between the United States and Iran in Doha, with both Brent and U.S. crude benchmarks extending losses that sent the former to its weakest quarterly performance since 2020.
As of 9:55 AM (Bangkok time), Brent futures fell 1.02% to $70.84 a barrel, while West Texas Intermediate slipped 1.20% to $67.76, following a previous session where both contracts dropped over 1% to four-month lows.
The drop in prices comes as market participants weigh the implications of progress reported in U.S.-Iran negotiations focused on the Strait of Hormuz, a strategic passageway for about 20% of global oil shipments before recent hostilities in the region. A Reuters report, citing sources familiar with the matter, indicated that the talks made constructive headway toward de-escalating tensions and discussing maritime security and the release of frozen Iranian assets.
U.S. officials, including President Donald Trump, echoed the sense of progress, with Trump telling reporters the process was advancing positively and describing the denuclearization discussions as going well.
However, the talks took place without direct meetings between U.S. and Iranian officials; instead, Qatari mediators facilitated communication. The diplomatic initiative followed a weekend exchange of strikes that threatened to undermine the ongoing 60-day ceasefire between the two countries.
Citing two senior Iranian sources, the report noted that Tehran is intent on securing recognition for its authority over the strait and plans to impose shipping tolls once a grace period ends in mid-August. Despite these risks, U.S. Vice President JD Vance noted that oil shipments through the Strait of Hormuz have largely returned to levels seen before the recent conflict, though no specific data was provided.
According to ING estimates, around 11 tankers traversed the Strait of Hormuz on Tuesday, a figure below last week’s high of 24, but with inbound traffic beginning to rebound as ship operators regain confidence sending vessels through the area.
OPEC+ member states are expected to approve another increase in collective output targets when they meet on Sunday, with the quota set to rise by roughly 188,000 barrels per day in August, in line with adjustments for June and July, according to Reuters.
In the United States, crude stocks fell by 3.8 million barrels last week to 408.4 million barrels, according to the Energy Information Administration. Although this marks the lowest inventory level since September 2018, the decrease fell short of analyst expectations, which anticipated a drawdown of 4.5 million barrels.
The market remains watchful for further developments in U.S.-Iran relations, with both supply outlook and security in the region continuing to influence price direction.
