Oil prices fell for a second consecutive session on Thursday, with Brent crude futures declining 73 cents, or 1.02%, to $70.83 a barrel by 10:02 AM GMT, while U.S. West Texas Intermediate crude dropped 83 cents, or 1.08%, to $67.84 a barrel. According to The Hindu BusinessLine, both benchmarks had fallen more than 1% in the previous session, settling at their lowest levels in four months. The decline extends losses after falling more than 3% over the previous two sessions, as markets continue to respond to improving supply conditions. Market sentiment improved after a US official said oil flows through the Strait of Hormuz had returned to pre-war levels, signalling that global energy supplies are steadily returning. The recovery has eased concerns that Iran could significantly disrupt shipping through the strategic waterway, which carries roughly a fifth of the world's seaborne crude. Crude has now erased the war premium built into prices during the conflict, with the rebound in tanker traffic through Hormuz and workarounds helping the United Arab Emirates restore exports to pre-conflict levels.
US and Iran concluded their indirect talks in Qatar on Wednesday without reaching an agreement, as reported by Reuters citing unnamed sources. Negotiators for the two countries spent two days in Doha discussing maritime traffic in the Strait of Hormuz and unfreezing Iran's funds, but there was no sign they had made headway toward a lasting peace. Qatar's Foreign Ministry said the next meeting will take place after funeral processions for Iran's late Supreme Leader Ayatollah Ali Khamenei, who is due to be buried on July 9. US Vice President JD Vance said oil flows through the waterway had returned to pre-war levels, without citing figures, providing concrete evidence of the recovery. US President Donald Trump said negotiations with Iran were making progress, while Qatar indicated that the next round of indirect talks would be scheduled as soon as possible after Iran concludes funeral ceremonies for its former Supreme Leader, who was killed during the conflict. Despite the easing tensions, Iran has reiterated its intention to maintain greater oversight of shipping through the Strait of Hormuz, while unresolved issues surrounding its nuclear programme and regional security continue to complicate negotiations during the current 60-day ceasefire period.
Oil prices have erased their entire war premium, sliding roughly 40% from their March peak near $120 to trade around $72.25 on Wednesday. According to The Hindu BusinessLine, Brent crude futures for August delivery rose 12 cents, or 0.16%, to $73.27 a barrel by 0959 GMT, but the contract remains headed for a third consecutive monthly decline and had fallen about 20% so far in June. US West Texas Intermediate (WTI) crude for August delivery rose 27 cents, or 0.38%, to $71.02 a barrel, though the benchmark remains on course for a second straight monthly loss, down around 19% in June. These levels represent a significant decline, with both Brent and WTI prices now returned close to their pre-war levels from February 27. The retreat follows stalled diplomacy between Iran and the United States, with traders shifting focus away from conflict risk and back toward supply, demand, and the broader economic outlook.
The US Energy Information Administration (EIA) reported a decline in crude oil inventories for the week ending June 26, according to The Hindu BusinessLine. US commercial crude oil inventories decreased by 3.8 million barrels from the previous week, bringing total inventories to 408.4 million barrels. At 408.4 million barrels, US crude oil inventories were about 7% below the five-year average for this time of year. Total motor gasoline inventories decreased by 2.3 million barrels from last week and were 7% below the five-year average for this time of year. Distillate fuel inventories increased by 2.5 million barrels last week and were about 8% below the five-year average for this time of year. Total products supplied in the US over the last four-week period averaged 20.6 million barrels per day, up by 1.7% from the same period last year. Over the past four weeks, motor gasoline product supplied averaged 9 million barrels per day, down by 2.6% from the same period last year, while distillate fuel product supplied averaged 3.7 million barrels per day over the past four weeks, down by 1.9% from the same period last year.
Saudi Aramco Chief Executive Officer Amin Nasser warned that disruptions in the Strait of Hormuz could delay the return of stability to global oil markets until 2027, as reported by The Economic Times. He said prolonged interruptions could affect nearly 100 million barrels of oil supply every week, emphasizing the strategic importance of the waterway. Adding to supply at a time of falling oil prices amid the gradual reopening of the strait, sources said on Wednesday that OPEC+ oil-producing countries will likely agree to a further hike in their output targets from August when they meet on Sunday. The target will increase by about 188,000 barrels per day for August, the same as for June and July, according to sources. In the US, crude inventories fell by 3.8 million barrels to 408.4 million barrels last week, the lowest level since September 2018, the Energy Information Administration said on Wednesday. This represents a significant improvement from earlier reports of smaller-than-expected inventory draws, though the draw was smaller than analysts' expectations in a Reuters poll for a drop of 4.5 million barrels, suggesting the market may have already priced in some inventory reduction.
