Oil Prices Steady as U.S.-Iran Talks Ease Supply Fears Ahead of Holiday Weekend

Oil prices traded little changed on Thursday as investors paused after weeks of sharp declines that pushed crude benchmarks back to levels seen before the recent U.S.-Iran conflict. Improved shipping activity through the Strait of Hormuz and easing concerns over supply disruptions helped keep prices under pressure, despite renewed military tensions between the United States and Iran earlier this week.

Brent crude futures for September delivery edged slightly higher to $71.60 per barrel, while U.S. West Texas Intermediate (WTI) crude for August delivery slipped 0.2% to $68.47 per barrel during afternoon trading.

The oil market has experienced significant volatility this year. Brent crude surged during the first quarter before reversing sharply in the second quarter, marking one of its steepest quarterly declines in years. The sell-off accelerated after the United States and Iran signed a memorandum of understanding in France on June 17, allowing shipping to resume through the strategically important Strait of Hormuz and easing fears of prolonged supply disruptions.

Although fresh exchanges of strikes between U.S. and Iranian forces briefly reignited geopolitical concerns earlier this week, market sentiment improved after indirect technical negotiations between both countries took place in Doha. While no final agreement was reached, Qatari officials described the talks as constructive, with both sides agreeing to continue discussions focused on maritime security, shipping through the Strait of Hormuz, and other confidence-building measures.

Shipping data also supported the calmer outlook. According to Kpler, vessel traffic through the Strait of Hormuz has remained stable since the memorandum was signed, including continued LNG tanker crossings, signaling improving conditions for energy exports from Gulf producers.

Meanwhile, ample global supply continues to weigh on crude prices. The U.S. Energy Information Administration reported domestic crude oil production reached a record 13.93 million barrels per day in April, reinforcing expectations of strong supply.

Analysts also noted that easing geopolitical risks have reduced immediate concerns over oil availability, although uncertainty in the Middle East continues to provide some support for prices. At the same time, China's commodity demand remains resilient, with ANZ highlighting gains in its China Commodity Index and energy sector.

Investors are now closely watching OPEC+, as the producer group is widely expected to consider another production increase in August, a move that could further influence global oil prices in the coming weeks.