Oil prices ease as investors await US-Iran talks; Brent crude falls to $72 per barrel

Oil prices continued to ease on Tuesday as markets tracked the outcome of potential US-Iran engagement in Doha, even as weekend missile exchanges signalled instability. This comes after the two sides reached an interim peace deal aimed at ending the four-month conflict.Around 7 am IST, WTI crude stood at $70.23 per barrel down 0.52 or 0.73%, while Brent crude slipped to $72.54, declining 0.61 or 0.83%. This comes after the benchmarks had already fallen 10.6% last week after crude shipments through the strait rose to their highest since the US-Israeli war on Iran began in late February.Market sentiment was shaped by expectations around diplomacy and supply routes through the Strait of Hormuz. “Investors are pricing in hopes of a positive outcome from the Doha talks, even though real normalisation of flows through the Strait of Hormuz is not yet visible,” Tim Waterer, chief market analyst at KCM Trade told Reuters. He added, “The market is cautiously hopeful but still hedging its bets until we see more tangible signs of de-escalation.”Meanwhile, diplomatic signals from Tehran remained mixed. Iranian and Omani experts are set to begin talks in the coming days on revising transit routes through the Strait of Hormuz, Iranian deputy foreign minister Kazem Gharibabadi said on state television on Monday, adding that Iran would seek to restrict vessels outside designated paths.However, the country’s foreign ministry spokesperson Esmaeil Baghaei stated that no negotiations at any level with the United States are scheduled in the coming days.In Washington, US President Donald Trump said, “The meeting in Doha is going to be perhaps important, perhaps not. We’re going to find out.” He also said that Iran had requested a meeting with US counterparts and that discussions were planned for Tuesday in Doha.The uncertainty highlights the fragile nature of the June 17 interim arrangement that paused fighting, disrupted global oil flows via the Strait of Hormuz, and created political pressure for Trump ahead of November’s congressional elections.Israel, the third country embroiled in the conflict, has not taken part in the US-Iran discussions and has distanced itself from the agreement.At the same time, Middle Eastern producers continue loading oil and LNG cargoes despite renewed attacks on ships in the Strait of Hormuz and recent exchanges of strikes between US and Iranian forces, according to shipping data.Analysts at Goldman Sachs, in a June 29 note, said that Gulf oil flows could be recovering steadily. “Assuming Persian Gulf flows continue to recover at the same average pace as over the last two weeks… Gulf flows could return to pre-war levels of 23 million barrels per day already by early July,” the report said. It added that shipping traffic last week reached its highest level since the conflict began at the end of February.On the commodity side, oil markets have finally eased to the pre-war levels near $70 per barrel, after over 100 days of soaring beyond the $100 per barrel mark.