Oil Prices Fall as Iran-Oman Talks Raise Hopes for Hormuz Shipping Recovery

Oil prices fell on Wednesday as negotiations between Iran and Oman raised hopes that shipping through the Strait of Hormuz could recover. The prospect of improved tanker access is prompting traders to reduce the geopolitical risk premium from crude prices.

Brent crude futures fell 1.80% to $85.70 a barrel, while U.S. West Texas Intermediate futures dropped 2.04% to $80.68. The declines extended Tuesday's selloff, when traders played down the immediate supply consequences of expanded U.S. sanctions against Iran.

The negotiations between Tehran and Muscat have shifted market expectations toward the possibility of restoring more regular shipping through the strait. However, broader negotiations remain unresolved.