Iran-Oman Talks Sink Oil Prices as Hormuz Reopening Prospect Weighs on Crude

Oil prices continued to slide on Wednesday, extending losses from the previous session after Iran announced that it had resumed talks with Oman over reopening the Strait of Hormuz.

The news overshadowed US economic sanctions imposed on Iran earlier in the week and weighed heavily on crude prices as traders priced out some supply risks.

The countries discussed a 'joint temporary navigational corridor' through the Strait, allowing for commercial traffic to pass through. This prospect led to losses in oil prices, with Brent falling 1.7% to $81.01 a barrel by 19:58 ET (23:58 GMT), following a more than 3% drop in the previous session.

Despite resumed talks and some Iraqi oil tankers being allowed to pass through Hormuz, shipping activity remains at a fraction of pre-war levels, keeping oil supplies from the region constrained. Prior to the conflict, about 20% of the world's oil passed through Hormuz, greatly disrupting global supplies and sending prices higher.