Oil Prices Decline as Supply Concerns Ease Amid Ongoing US-Iran Diplomacy

Oil prices declined for a third consecutive day as supply concerns eased and traders awaited the next round of diplomacy between the US and Iran. The Brent crude benchmark fell towards $104 a barrel, while West Texas Intermediate (WTI) was near $101. Saudi Arabia has restored about half its capacity on the damaged East-West pipeline to its Red Sea coast.

Meanwhile, some tankers continue to traverse the Strait of Hormuz, despite Iranian threats to vessels using unapproved routes. The US Energy Secretary estimated that 11 million barrels per day transit through the waterway over a seven-day period.

Priyanka Sachdeva, head of market insights at Phillip Nova Pte in Singapore, said that oil's recent drop appears to be a cooling of the geopolitical risk premium rather than a fundamental reversal. JPMorgan Chase & Co analysts, including Natasha Kaneva, noted that predicting the length and impact of the Iran war has become increasingly difficult.