Oil Prices Plummet on Hopes for Middle East Talks to Ease Supply Disruptions

Oil prices continued their downward trend on Thursday, falling more than $1 per barrel, as hopes rose for diplomatic talks between Iran and Qatar to ease supply disruptions in the Middle East.

The Strait of Hormuz, a critical waterway connecting major Gulf oil producers to markets, has been affected by the conflict. Before the U.S.-Israeli war on Iran started on February 28, it carried oil and LNG shipments equal to about one-fifth of global consumption. However, since Iran shut the waterway in response, oil flows have dropped to a quarter of their pre-war level.

Iranian officials said the strait would not open unless the U.S. met Tehran's conditions under an interim ceasefire agreement. Daniel Hynes, senior commodity strategist at ANZ, noted that while prospects for the Strait's reopening improved amid ongoing talks, concerns over shortages in the oil market persist.