Oil Prices Retreat on Qatar's US-Iran Diplomacy Update

Oil prices pared their gains on Tuesday after Qatar stated that diplomatic efforts to resolve the US-Iran conflict were ongoing. Front-month Brent futures had risen to $83.94 a barrel, up 17 cents or 0.2%, but later retreated.

US West Texas Intermediate (WTI) crude was down 30 cents, or 0.37%, at $80.04 a barrel after reaching a session high of $82.33. Giovanni Staunovo, an analyst with UBS, said that oil prices were pairing earlier gains on comments from Qatari officials saying a potential US-Iran resolution has been drafted.

The Hormuz dispute remains a central sticking point in talks between the two nations. Before the conflict began in late February, the Strait of Hormuz handled about one-fifth of global daily oil and liquefied natural gas supplies.

Iran wants control over inbound shipping through the Strait of Hormuz and visibility over outbound traffic, with the ability to intervene if necessary, under a plan being discussed with Oman to reopen the strategic waterway. Shipping data showed that six Saudi-flagged supertankers changed course in the Gulf of Aden recently for southern Africa.

Goldman Sachs expects Brent to remain in a $80 to $90 a barrel range until there is either confirmation of a new US-Iran agreement or a significant escalation in attacks and targets.