Oil prices retreated on Thursday as diplomatic progress between Iran and Oman over a shipping route through the Strait of Hormuz prompted selling pressure across energy markets, with investors closely monitoring the trajectory of broader US-Iran negotiations. Brent crude futures fell 33 cents, or 0.42%, to $79.12 a barrel, while US West Texas Intermediate futures declined 42 cents, or 0.56%, to $74.80 a barrel. Brent had settled slightly higher on Wednesday, while WTI had edged lower in the previous session.
Iran's Foreign Ministry spokesperson Esmaeil Baghaei said on Wednesday that Tehran and Muscat had reached an understanding on the geographic coordinates for a shipping route through the Strait of Hormuz, with a joint announcement being finalised, provided that certain third parties did not interfere. "Some selling pressure emerged following reports that talks between Iran and Oman are making progress," said Yuki Takashima, economist at Nomura Securities. He added that prices have returned to levels seen when the United States and Iran signed an interim peace agreement on June 17, with investors closely watching whether the two sides can reach a final deal.
The proposed framework would give Tehran control over ships entering the Gulf through the Strait of Hormuz, according to a senior Iranian source and two regional officials cited by Reuters — representing one of the biggest concessions yet to Iran. There was no immediate US comment on the proposal. While President Donald Trump has stated that a deal reopening the strait is imminent, US officials have repeatedly insisted they would never agree to Iran controlling access to one of the world's most critical energy trade routes.
Iran has also warned Gulf states that any new US military strike on its territory would trigger retaliation against critical energy infrastructure across the region, according to five sources cited by Reuters, as Tehran seeks to raise the cost of potential military action by threatening Washington's closest regional allies. ING analysts underscored the centrality of the diplomatic track to any market recovery in a note published Thursday. "The real hinge point now becomes the trajectory of US-Iran discussions, because meaningful progress there is essential before disrupted energy flows can realistically resume," they wrote.
Shipping data showed that Gulf countries' crude oil and condensate exports remained largely steady in July but were still approximately 40% below pre-war levels, reflecting the ongoing impact of regional hostilities on energy supply chains. Adding to the complex geopolitical picture, Yemen's Iran-aligned Houthi movement claimed on Wednesday to have launched missile attacks on a Saudi oil tanker off the Red Sea port city of Yanbu and a separate strike on a Saudi oil tanker in the Gulf of Aden. Saudi Arabia offered no immediate confirmation of either incident.
Takashima noted that concerns over Houthi attacks on Red Sea shipping were limiting optimism regarding a broader resolution to Middle East shipping disruptions. On the supply side, data from the US Energy Information Administration released Wednesday showed that US crude inventories rose as refineries slightly eased processing rates and imports edged higher, adding a further bearish signal to the market. Source: Reuters, via The Express Tribune, August 6, 2026.
Source: tribune.com.pk