Oil Prices Tumble as Strait of Hormuz Talks Show Promise
Oil prices continued their decline on Thursday, extending losses for a fourth day in Brent crude and a fifth day in West Texas Intermediate crude. The losses came as talks between Iran and Qatar raised hopes that the Strait of Hormuz would reopen, easing supply disruptions from the Middle East conflict.
Brent crude futures fell 41 cents to $87.43 a barrel, while West Texas Intermediate crude futures dropped 37 cents to $81.86 a barrel. The Strait of Hormuz is a vital waterway that connects major Gulf oil producers to markets and carries one-fifth of global oil consumption.
Iran's Revolutionary Guards said Iran and Oman had agreed on how to share the strait, but the deal was still pending final details from Iranian authorities. Qatari Prime Minister Sheikh Khalifa bin Abdulaziz Al Thani will visit Iran on Thursday to relaunch diplomatic talks aimed at ending the conflict.
ANZ's senior commodity strategist Daniel Hynes noted that while the prospect of the Strait of Hormuz reopening improved, concerns over oil shortages persisted. He also highlighted the impact of the Middle East and Russia-Ukraine conflicts on diesel markets, citing damaged refineries in the region and reduced exports from Ukraine.