Oil prices moved lower in early trade following a statement from Qatar that indirect negotiations between the United States and Iran had shown "positive progress." The talks in Doha, which concluded on Wednesday, focused on maritime traffic through the Strait of Hormuz - a waterway that handled roughly one-fifth of global oil supply before the war.
By 0102 GMT Brent futures were trading down 73 cents, or 1.02%, at $70.84 a barrel. U.S. West Texas Intermediate crude fell 83 cents, or 1.21%, to $67.75 a barrel. In the previous session both benchmarks had slipped by more than 1% to their lowest levels in four months.
Sources familiar with the discussions said U.S. and Iranian negotiators spent two days in Doha addressing maritime traffic through the strait and the issue of unfreezing Iranian funds. While tanker movements have partially resumed, the two countries exchanged strikes last weekend after Iran attacked a cargo ship.
Two senior Iranian sources told officials that Iran is determined to secure international recognition of its control over the strait, even if it must do so by force. Tehran has repeatedly indicated plans to begin imposing tolls on shipping from mid-August, following the expiration of a toll-free period defined in the initial agreement.
Tanker traffic through the strait has begun to recover. U.S. Vice President JD Vance said oil flows through the waterway had returned to pre-war levels, though he did not provide supporting figures. Market participants have interpreted the reopening and the restoration of crude flows as a factor increasing competition for market share and contributing downward pressure on prices.
Haitong Futures noted in a research note that as the Strait of Hormuz remains open and crude continues to flow out, competition for market share is helping to push oil prices lower, and expectations of oversupply are rising.
Compounding supply-side pressure, sources said OPEC+ producers are likely to agree on a further increase in their collective output targets when they meet on Sunday. The planned boost would be about 188,000 barrels per day for August, the same incremental increase applied for June and July, according to the sources.
On the U.S. supply front, the Energy Information Administration reported that crude inventories fell by 3.8 million barrels last week to 408.4 million barrels - the lowest level since September 2018. The draw, however, came in smaller than analysts' expectations in a Reuters poll, which had forecast a 4.5 million barrel drop.
With tanker traffic recovering, prospective OPEC+ output additions, and a U.S. inventory draw that was less pronounced than forecast, market participants are weighing increased supply against demand dynamics. These developments coincided with early-session price declines, reflecting shifting balances between flows out of the strait and overall global supply expectations.
Market context: The confluence of geopolitical negotiation outcomes, operational changes in a major shipping chokepoint, producer group output decisions, and official U.S. stock data are currently shaping near-term crude price direction.