Oil Prices Trim Gains Amid Progress in Hormuz Talks
Oil prices trimmed their gains on Tuesday after reaching their highest in over a week due to signs of progress in talks between Oman and Iran over shipping through the Strait of Hormuz. Brent crude futures fell by $0.21, or 0.24%, to $87.51 a barrel, while US West Texas Intermediate crude futures dropped by $0.04, or 0.05%, to $82.09.
The increase in oil prices was largely driven by the ongoing disruption to Middle East energy flows and signs of de-escalation in the region. However, analysts are cautious about the impact of any potential deal on oil prices, with Fawad Razaqzada from City Index and FOREX.com saying 'any signs of de-escalation or any signs of a deal are good news for risk assets and bad for oil.'
Despite the trimming of gains, oil prices remain elevated due to the ongoing geopolitical tensions in the region. The Strait of Hormuz remains a chokepoint for global energy flows, with traffic through the strait dropping to just six vessels on Monday.