Oil prices continue to fall amid potential talks between the U.S. and Iran
On August 5, global oil prices continued to decline amid expectations of possible progress in negotiations between the U.S. and Iran to end the war. Investors are also closely monitoring the prospects for the resumption of shipping through the Strait of Hormuz.
According to the agency, Brent crude futures lost 92 cents (1.2%) and are trading at $78.44 per barrel. Overall, the price of Brent has fallen by more than 12% since the start of the week.
Meanwhile, U.S. West Texas Intermediate (WTI) crude fell by $1.07 (1.4%) to $74.70 per barrel. Since the start of the week, its price has dropped by more than 11%.
In addition, yesterday Brent closed below the psychological threshold of $80 per barrel for the first time since July 13, losing more than 5% over the course of the day.
The price decline was triggered by a statement from Qatar that mediators were making progress in negotiations to end the war.
At the same time, Tehran denies U.S. President Donald Trump’s claims that negotiations are taking place, which is keeping the market in a state of uncertainty.
Priyanka Sachdeva, head of market research at Phillip Nova, noted that the current drop in oil prices may be temporary.
“Although the immediate geopolitical premium has disappeared, the broader supply picture calls for caution. If diplomatic efforts fail and physical supplies eventually dry up, the current price decline may prove short-lived, as the drawdown in inventories will amplify the impact of any future supply-side shock,” she emphasized.
Analysts note that before the war with Iran began, approximately 20% of global oil and liquefied natural gas shipments passed through the Strait of Hormuz.
According to experts at IG, the main uncertainty remains the future status of this strategic maritime route.
“The main sticking point appears to be whether Iran will continue to insist on some control over the waterway and whether the U.S. will stand firm and refuse to accept such a scenario,” the analysts noted.
This was reported by Reuters.
As a reminder, global oil prices resumed their rise on Tuesday, August 4, following a sharp drop the previous day.
U.S. President Donald Trump stated that the Strait of Hormuz could be fully open to international shipping as early as August 4. After that, he said, Washington and Tehran will move on to a new phase of negotiations focused on Iran’s nuclear program.
U.S. President Donald Trump also called on American oil companies to immediately lower gasoline prices for consumers. Separately, he criticized Chevron CEO Mike Wirth.
