Crude oil prices moved lower for a third consecutive session on Wednesday as growing expectations of a temporary agreement between the United States and Iran eased concerns over potential supply disruptions through the Strait of Hormuz.
At 02:56 ET (06:56 GMT), October Brent crude futures were down 0.5% at $79.00 per barrel, while September West Texas Intermediate (WTI) futures fell 0.7% to $75.27 per barrel.
The latest declines followed Tuesday’s sell-off, when both international benchmarks dropped by more than 5%.
Hormuz negotiations remain the key market driver
Reports from Axios indicated that the United States, Iran and Oman are close to finalising an interim arrangement aimed at restoring commercial shipping through the Strait of Hormuz, with Washington hoping to unveil the agreement on Wednesday.
However, Iranian media said Tehran believes reopening the strategic waterway will be postponed while the United States continues to issue threats.
Qatari officials also confirmed that mediators have prepared a draft proposal designed to bridge the remaining differences between the two countries.
According to Qatar’s government, US President Donald Trump discussed regional de-escalation efforts during a telephone conversation with Emir Sheikh Tamim bin Hamad Al-Thani.
If implemented, the proposal would reopen one of the world’s most important energy corridors, through which roughly 20% of global oil and liquefied natural gas shipments normally pass.
The diplomatic push follows recent comments from Trump, who said negotiations with Iran had begun and that Tehran had a “last chance” to reach an agreement.
Iran has continued to reject claims that formal talks are underway, leaving uncertainty over whether an agreement can ultimately be reached.
Inventory build and security concerns keep traders cautious
Despite improving diplomatic sentiment, supply risks have not disappeared.
Another merchant vessel reportedly came under attack near the Strait of Hormuz on Tuesday, highlighting the ongoing security challenges facing the region.
Meanwhile, fresh inventory figures from the American Petroleum Institute (API) showed US crude stockpiles increased by 2.69 million barrels during the week ended 31 July, surprising analysts who had forecast a decline of around 2 million barrels.
Attention now turns to the official US Energy Information Administration (EIA) report, which investors will watch closely for confirmation of the inventory data.
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