Oil prices have fallen for a third straight session as crude exports through the Strait of Hormuz continue to recover and indirect negotiations between the U.S. and Iran show progress. This combination has alleviated fears of supply disruptions. Brent crude for September hovered near $71 per barrel, while West Texas Intermediate traded around $68 per barrel.
The recovery in exports is significant, with U.S. officials reporting crude flows through the Strait exceeding 10 million barrels per day. This resurgence, along with alternative shipping arrangements by the United Arab Emirates, has pushed overall exports closer to pre-conflict volumes. The progress in U.S.-Iran talks, which Qatar states will resume after funeral ceremonies for Iran's former Supreme Leader, further contributes to market confidence.
Analysts like Saul Kavonic of MST Marquee note that prices are drifting lower as the increased oil flow from the Strait of Hormuz coincides with Strategic Petroleum Reserve releases and curtailed demand. This is happening while flare-ups between Iran and the U.S. remain contained. Despite the improving export outlook, Iran has reiterated its intention to maintain control over shipping through the Strait, indicating that key issues such as its nuclear program and regional security remain unresolved.
Market experts like UBS have already cut their average Brent price forecasts, now expecting the benchmark to average $80 per barrel in the second half of 2026 and $75 in 2027, down from previous predictions. This comes as U.S. commercial crude inventories have fallen for 12 consecutive weeks to their lowest level since March 2025, excluding the Strategic Petroleum Reserve. The American Petroleum Institute estimated a 6.1 million barrel decrease last week, with the U.S. Energy Information Administration expected to confirm this trend, which would leave commercial inventories at a seven-and-a-half-year low of 406 million barrels.
