Oil prices fell for a fourth straight day on Thursday after news that the US and Iran have made progress in diplomatic talks over the end of the war and reopening of the Strait of Hormuz.
Futures on Brent crude, the international benchmark, ticked down by 0.8% to trade below $71 per barrel, while those on US benchmark WTI crude shed roughly 1.1% to fall below $68 a barrel, holding at prices not seen since the first days of March.
After news on Wednesday that the US and Iran had concluded first-round talks in Doha on Wednesday with no clear progress made, the foreign ministry of host country Qatar said in an X post on Thursday that “positive progress” had been made between the two nations’ negotiators.
Next-round talks are being scheduled for a date after the funeral processions on July 9 for former Supreme Leader Ayatollah Ali Khamenei, who was killed in the first wave on US and Israeli airstrikes on Tehran in late February.
“Crude oil prices are back at near pre-war levels, as if more than 100 days of conflict that shut one of the world’s most important shipping lanes and triggered the largest oil supply shock in modern history never happened,” Natasha Kaneva, head of commodities research at JPMorgan, said Thursday in a note to clients.
The situation in the Middle East remains fragile. Oil prices temporarily spiked in the early half of the week after the Iranian military struck a ship transiting the Strait of Hormuz and declared the route closed, prompting a wave of airstrikes by the US on the country.
The two sides of the conflict agreed afterward to cease military activity and resume talks, but Iran’s central military command on Thursday warned that “any U.S. intervention in the Strait of Hormuz will face a decisive and swift response from the armed forces,” in comments reported by semi-official Iranian news agency Fars.
Iran has also continued to insist that the Strait of Hormuz remains under the nation’s control, despite its longstanding status as an international waterway guaranteed freedom of navigation under international law. Reports have suggested that Iran and Oman, which sits on the southwestern coast of the strait, may be jointly developing a scheme to levy tolls or other fees against ships looking to transit the strait — a stance US Secretary of State Marco Rubio has called unacceptable.
“The Strait of Hormuz is not a playground for the aggressor America, but rather the territory of the indisputable sovereignty of the Islamic Republic of Iran,” Iran’s military command Khatam al-Anbiya said Thursday, per Fars. “The security of this vital waterway is the red line of the powerful armed forces of Islamic Iran.”
Oil prices have largely been driven down over the past month by a growing surge of oil moving through the Strait of Hormuz in a slow renormalization toward the pre-war volumes of roughly 15 million barrels’ worth per day.
While it is difficult to assess the exact amount of oil currently moving through the waterway, thirty-four vessels made confirmed crossings on Wednesday, according to intelligence firm Kpler, split evenly between inbound and outbound voyages. Oil exiting the Persian Gulf provides immediate relief to markets, but experts are closely watching the count of inbound vessels that will signal capacity for future exports once the initial supply of oil sitting on the water in the Gulf is moved out.
In a sign of positive movement for the US, falling crude oil prices have begun to bring US gasoline pump prices down, reducing some monetary pressure on Americans ahead of the July 4 weekend — and right as the country’s summer driving season ramps up.
Gas prices across the country averaged $3.83 per gallon on Thursday, per AAA, down from an average of $4.29 a gallon one month ago.
Jake Conley is a breaking news reporter covering US equities for Yahoo Finance. Follow him on X at @byjakeconley or email him at jake.conley@yahooinc.com.
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