Oil Prices Plummet as Hormuz Talks Resume and US Inventories Rise

Oil prices on global markets have taken a hit, falling nearly 2% due to several factors. Brent crude futures dropped to $86.80 per barrel, while WTI crude declined by 1.8% to $80.87 per barrel. These benchmark crude grades also lost over 3% in value the previous day.

The main reason for the decline is the resumption of talks between Iran and Oman on managing traffic through the Strait of Hormuz. The two countries are discussing the establishment of a 'temporary joint navigation corridor' for passage through the strait, with an agreement reached on clearing mines from the area.

An unexpected increase in U.S. crude oil inventories has also put pressure on prices. According to the American Petroleum Institute (API), inventories rose by 4.2 million barrels in the week ending August 21, exceeding market expectations of a 600,000 barrel increase.