Oil prices dropped over 1% on Tuesday, continuing a downward trend after U.S.-Iran peace talks indicated progress in restoring crude flows through the Strait of Hormuz. Brent crude futures fell by $1.09, or 1.4%, to $76.81 per barrel, while U.S. West Texas Intermediate decreased by 87 cents, or 1.2%, to $72.99 per barrel.
Prices had already declined more than 3% on Monday, following a U.S. decision to grant Iran a 60-day sanctions waiver amid peace discussions. Reports of reduced hostilities in Lebanon further contributed to this decline. ING analysts noted that the gradual increase in oil flows through the Strait of Hormuz is impacting market sentiment.
Ship-tracking data revealed that two tankers carrying nearly 2 million barrels of oil transited the Strait on Monday, suggesting a recovery in traffic. Neil Crosby from Sparta Commodities stated that rising transits could signal both physical oil movement and diplomatic progress, though skepticism remains regarding the sustainability of this trend.
Despite these developments, market analysts express caution, citing deep-seated mistrust between Washington and Tehran. U.S. crude inventories are expected to have decreased last week, with the Strategic Petroleum Reserve reaching its lowest level since June 1983.
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