Oil prices are experiencing a downturn for the third straight session, driven by the ongoing recovery of crude exports through the Strait of Hormuz and positive developments in indirect negotiations between the U.S. and Iran. Brent crude for September delivery is trading near $71 per barrel, while West Texas Intermediate (WTI) is hovering around $68 per barrel. This decline follows a more than 3% drop for Brent over the previous two sessions.
Crude exports through the strategically important Strait of Hormuz have surpassed 10 million barrels per day, according to a U.S. official, indicating increased market confidence in the stability of shipments despite recent hostilities. U.S. President Donald Trump also acknowledged progress in the indirect talks with Iran. This comes after oil recorded its weakest quarterly performance since 2020. While overall regional supplies remain below pre-conflict levels, exports from the United Arab Emirates have returned to pre-war volumes through alternative shipping arrangements, and U.S. crude grades have weakened due to softening international demand.
Despite the improved export outlook, Iran has reaffirmed its intent to maintain control over shipping in the Strait of Hormuz, underscoring that critical issues such as Tehran's nuclear program and regional security concerns are still unresolved. President Trump reiterated on Wednesday that Iran must not be allowed to develop nuclear weapons. Saul Kavonic, senior energy analyst at MST Marquee, noted that prices continue to drift lower as the increased flow of oil from the Strait of Hormuz coincides with Strategic Petroleum Reserve (SPR) releases and reduced demand, as U.S.-Iran tensions remain contained for now.
U.S. commercial crude inventories have fallen for 12 consecutive weeks, reaching their lowest level since March 2025, excluding the Strategic Petroleum Reserve. The next round of U.S.-Iran talks is expected to be scheduled as soon as possible after funeral ceremonies for former Iranian Supreme Leader Ali Khamenei, who was killed in an airstrike at the conflict's outset. These ceremonies are slated to begin on July 4 and last for several days, according to Iranian state media.
