02 July 2026•Update: 02 July 2026
Oil prices fell on Thursday as signs of progress in negotiations between the US and Iran eased concerns over potential supply disruptions in the Middle East, although stronger-than-expected US fuel demand helped limit further losses.
International benchmark Brent crude traded at $70.79 per barrel at 08.53 a.m. local time (0553 GMT), down around 1.1% from the previous close of $71.57.
US benchmark West Texas Intermediate (WTI) fell about 1.1% to $67.82 per barrel, compared with $68.58 in the previous session.
Market sentiment weakened after Qatar announced that indirect talks between US and Iranian delegations in Doha had concluded with "positive progress" on issues related to the recent memorandum of understanding.
"Qatar & Pakistan mediators concluded separate meetings with the US & Iranian negotiators in Doha today, with positive progress made on issues related to the Islamabad Memorandum of Understanding, building on the outcomes of the Lake Lucerne Summit," Foreign Ministry spokesman Majed Al Ansari wrote on X.
"The parties agreed to continue discussions over the coming period, with the next meeting to be scheduled at the earliest possible time following the funeral processions of the former Iranian Supreme Leader" Ali Khamenei, he added.
Khamenei was killed in a US-Israeli strike on Feb. 28. His funeral is scheduled for Friday.
Despite the improving diplomatic outlook, developments surrounding the Strait of Hormuz remained in focus.
Iranian Deputy Foreign Minister Kazem Gharibabadi criticized a regional security meeting hosted by the US Central Command (CENTCOM) in Bahrain, saying such gatherings could not establish a legitimate security framework for the Gulf.
In a post on X, Gharibabadi said regional security could only be achieved through an end to foreign intervention, the withdrawal of US forces from the region, respect for national sovereignty and recognition of new geopolitical realities, “not under America's military umbrella.”
He also said the future status of the Strait of Hormuz would be determined by Tehran, not CENTCOM.
CENTCOM hosted senior defense officials from 12 countries in Bahrain on Wednesday to discuss regional security, defense cooperation and the protection of commercial shipping through the Strait of Hormuz.
Limiting the decline in prices, fresh US inventory data pointed to resilient fuel demand.
The US Energy Information Administration (EIA) said commercial crude oil inventories fell by around 3.8 million barrels to 408.4 million barrels in the week ended June 26, exceeding market expectations for a decline of about 2.9 million barrels.
Strategic petroleum reserves also declined by around 5.5 million barrels to 325.7 million barrels, while gasoline inventories fell by approximately 2.3 million barrels to 214 million barrels.
Analysts said the combination of easing geopolitical tensions and stronger-than-expected US demand signals is likely to keep oil prices sensitive to both diplomatic developments and inventory data in the coming sessions.
