July 02, World (LNW): Global oil prices fell for a third consecutive trading session on Thursday, with both major crude benchmarks slipping by around one per cent as signs of progress in indirect negotiations between Iran and the United States eased fears of supply disruptions in the Middle East.
Investor sentiment improved after Qatar confirmed that discussions between Tehran and Washington had achieved encouraging progress on matters linked to the June memorandum that brought an end to recent hostilities. While the talks have yet to produce a long-term political settlement, markets responded positively to indications that both sides remain engaged in dialogue.
Brent crude futures declined by 77 cents, or 1.1 per cent, to US$70.80 a barrel, while US West Texas Intermediate (WTI) crude dropped 84 cents, or 1.2 per cent, to US$67.74 a barrel during early trading. The latest losses follow declines of more than one per cent in the previous session, leaving both benchmarks at their lowest levels in four months.
Analysts said the continued operation of the Strait of Hormuz, one of the world’s most strategically important shipping routes for crude oil, has helped calm concerns over supply. Before the recent conflict, the waterway carried around one-fifth of global oil shipments, and uninterrupted exports have fuelled expectations of ample supplies in international markets.
Adding further downward pressure on prices are expectations that OPEC+ producers could agree to another increase in oil output when the alliance meets later this week. Market participants believe additional production, combined with stable shipping through the Gulf, could contribute to an oversupplied market in the months ahead.
Meanwhile, Swiss investment bank UBS revised its outlook for crude prices, lowering its Brent forecasts for the remainder of the year following the easing of tensions and the resumption of normal shipping activity through the Strait of Hormuz. The bank now expects Brent crude to average around US$80 per barrel during the second half of the year and approximately US$75 per barrel in 2027.
Despite the more optimistic market outlook, UBS cautioned that geopolitical risks have not disappeared entirely, noting that tanker traffic entering the Persian Gulf has yet to return fully to normal levels. The bank warned that any renewed escalation in regional tensions could quickly reverse the recent decline in oil prices.
Qatar also confirmed that the next round of indirect discussions between Iranian and US representatives is expected to take place after the funeral ceremonies for Iran’s late Supreme Leader, Ayatollah Ali Khamenei, scheduled for 9 July, keeping diplomatic efforts alive despite the absence of a comprehensive peace agreement.