Brent Drops To $71 Amid Recovering Hormuz Oil Flows And Iran Diplomacy

Oil prices declined for a third consecutive session on Thursday as crude shipments through the Strait of Hormuz continued to recover and investors remained hopeful that ongoing indirect talks between the United States and Iran could help ease geopolitical tensions and reduce the risk of supply disruptions. The improvement in oil flows through one of the world's most critical shipping routes has helped calm markets after weeks of heightened volatility triggered by the conflict in the Middle East.

Brent crude for September delivery traded near $71 per barrel, extending losses after falling more than 3% over the previous two trading sessions. Meanwhile, US benchmark West Texas Intermediate (WTI) hovered around $68 per barrel, reflecting softer market sentiment as fears over immediate supply shortages receded. The decline follows a sharp rally in oil prices earlier, when concerns over possible disruptions in the Strait of Hormuz had driven crude higher.

Investor confidence improved after a US official said oil shipments through the Strait of Hormuz had recovered to more than 10 million barrels per day, indicating that global energy supplies are steadily normalising. The Strait of Hormuz is one of the world's most strategically important maritime routes, carrying roughly one-fifth of global seaborne crude oil exports. Any disruption to traffic through the narrow waterway can significantly impact global energy markets and push oil prices higher.

Also Read: Brent Oil Extends Gains Above $73 Amid Iran Tensions And Hormuz Shipping Recovery

Markets also drew support from diplomatic developments between Washington and Tehran. US President Donald Trump said negotiations with Iran were making progress, raising hopes that continued engagement could reduce tensions in the region. Separately, Qatar said the next round of indirect US-Iran talks would be scheduled as soon as possible after Iran concludes funeral ceremonies for its former Supreme Leader, Ali Khamenei, who was killed during the recent conflict. The ceremonies are expected to begin on July 4, after which diplomatic efforts are likely to resume.

The combination of improving shipping activity and renewed diplomatic engagement has reduced concerns that Iran could take steps to disrupt oil exports through the Strait of Hormuz. Analysts say the market is now closely watching both geopolitical developments and supply data for further direction. While tensions in the Middle East remain a key risk factor, traders are increasingly focusing on whether negotiations between the US and Iran can lead to greater regional stability and ensure uninterrupted crude supplies. Any setback in talks or renewed threats to shipping through the Strait of Hormuz could quickly reverse the recent decline in oil prices, underscoring the continued sensitivity of global energy markets to geopolitical events.

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