Easing Gulf tensions and Iran-Oman talks on safe navigation through the Strait of Hormuz weigh on oil prices.
Oil prices extended their decline on Wednesday as concerns over a wider military conflict in the Gulf eased, while traders assessed the prospects of an Iran-Oman agreement to secure safe passage through the Strait of Hormuz.
International benchmark Brent crude futures for October delivery fell 2.08% to $86.74 a barrel as of 2:41 a.m. ET, while US West Texas Intermediate futures for October declined 2.37% to $80.41 per barrel.
Brent was later quoted at $86.54 a barrel, down 2.30%, according to market data.
Analysts said the easing geopolitical tensions had reduced concerns about potential disruptions to oil supplies from the Gulf, contributing to the decline in crude prices.
“U.S. sanctions on Iran were less severe than anticipated,” said Dan Coatsworth, head of markets at AJ Bell, adding that lower oil prices helped markets regain some stability as government bond yields eased from recent highs.
Paolo Broccardo, chief executive officer of BankPro, said the reduced prospect of military action had lowered the perceived risk to Gulf oil supplies, although the United States had not ruled out further interventions.
Broccardo also pointed to reported progress in talks aimed at de-escalating tensions and restoring navigation through the Strait of Hormuz.
