West Texas Intermediate (WTI) crude oil prices have fallen for a second consecutive day, trading around $69.70 per barrel during Asian hours. The decline is attributed to reduced supply concerns amid potential peace talks between the US and Iran in Doha. Brent crude August futures were down 1.03%, or $0.75, at $72.40 a barrel, while the more actively traded September contract saw a decrease of 0.54%, or $0.40, to $73.51. US West Texas Intermediate fell 0.66%, or $0.47, to $70.32 a barrel. These drops reflect investor optimism regarding a potential resolution to tensions in the Strait of Hormuz, even as Iran asserts its control over the strategic waterway.
Analysts have lowered their 2026 oil price forecasts for the first time since the conflict began, breaking a streak of five monthly increases. This shift in outlook is primarily due to the easing of geopolitical friction and the steady recovery of oil tanker traffic through the Strait of Hormuz. A Reuters poll also highlighted that the reopening of the Strait has significantly alleviated fears of prolonged supply disruptions, with Goldman Sachs analysts suggesting that Persian Gulf flows could return to pre-war levels of 23 million barrels per day by early July.
However, there are warnings of a looming supply glut, as global exports are rebounding faster than expected. Iran has reported shipping over 40 million barrels of oil since the US lifted its naval blockade, and Russian exports have simultaneously surged to record highs. This has led to a sharp buildup of barrels at sea. Partially offsetting this downward pressure were shrinking domestic supplies in the United States, with the American Petroleum Institute reporting a fall of 6.1 million barrels in US crude oil inventories for the week ended June 26, alongside a decline in gasoline stocks. Markets are now awaiting official data from the US Energy Information Administration to confirm these drawdowns.
Despite the positive signals from potential talks, analysts remain cautious. Tim Waterer, chief market analyst at KCM Trade, noted that investors are pricing in hopes of a positive outcome, but are still hedging their bets until more tangible signs of de-escalation emerge. Iran's Deputy Foreign Minister Kazem Gharibabadi stated that Iranian and Omani experts would discuss redefining transit paths through the Strait of Hormuz and that Iran would try to obstruct vessels outside defined routes. Meanwhile, Iran's Foreign Ministry spokesperson denied any direct negotiation meetings with the American side in the coming days, adding a layer of uncertainty to the diplomatic efforts.
