Oil Prices Drop on Diplomatic Progress in Strait of Hormuz

Oil prices declined on Thursday following new diplomatic efforts to resolve tensions in the Strait of Hormuz. The talks between Iran, Oman, and Qatar reduced immediate supply fears, but oil flows remain limited at around 25% of pre-war levels.

The price drop was led by Brent crude, which fell to $88.50 per barrel, while WTI oil dropped to $81.60. The long pause in U.S. strikes on Iran boosted hopes for easing supply disruptions.

However, the risk of another supply shock remains high due to tight diesel inventories and ongoing disruptions at Middle East refineries. Disruptions to Russian refineries by Ukrainian attacks have also cut global diesel output.