Global oil prices fell again on Thursday. Brent crude traded near $87 per barrel as investors watched diplomatic efforts involving Iran and Qatar.
Brent crude fell by 60 cents to $87.24 per barrel. This marked its fourth consecutive daily decline. Meanwhile, U.S. West Texas Intermediate crude dropped 56 cents to $81.67 per barrel. WTI recorded its fifth straight day of losses.
The decline reflects growing hopes that diplomatic talks could help reopen the Strait of Hormuz. The waterway plays a major role in global energy trade.
An Iranian senior source said Iran and Oman were working to finalize details of an agreement concerning the Strait of Hormuz. Iran’s Islamic Revolutionary Guard Corps also said the two countries had reached an understanding over the waterway’s management and related revenues.
Before the U.S.-Israeli war against Iran began on February 28, about one-fifth of global oil and gas supplies passed through the Strait of Hormuz. Shipping data now shows that oil flows through the waterway have fallen sharply since Iran attempted to restrict traffic.
Daniel Hynes, a financial markets strategist at ANZ, said continued negotiations have increased hopes of reopening the strait. However, he warned that supply concerns remain a major risk for oil markets.
Qatar’s prime minister was expected to travel to Tehran on Thursday. The visit aims to restart diplomatic discussions and support efforts to end the conflict.
The United States has paused its attacks on Iran for about a month. Washington has instead increased economic pressure on Tehran. Investors expect these developments to reduce restrictions on oil transportation from the Gulf.
However, major disagreements remain between the parties. Iranian officials have repeatedly said the Strait of Hormuz will remain closed unless Washington meets conditions linked to a temporary June ceasefire.
The regional conflict has also affected global diesel markets. Damage to Middle Eastern refineries and Ukrainian attacks on Russian refineries have reduced available diesel supplies.
U.S. Energy Information Administration data showed that U.S. fuel inventories fell by 2.2 million barrels last week. Total stocks declined to 103.4 million barrels, adding further pressure to global fuel markets.
