Brent Steadies as Traders Watch Peace Talks

Brent steadied above $73 per barrel on Wednesday after posting its steepest quarterly decline since 2020, as investors awaited updates on ongoing peace talks between the US and Iran in Doha, with both sides seeking to ease tensions over the Strait of Hormuz following recent clashes. Washington and Tehran are working toward a lasting resolution to the conflict, although Iran has maintained its position on controlling maritime traffic through the strategic waterway. Meanwhile, oil tanker traffic continues to recover, with shipments increasing after the US and Iran halted their recent exchange of fire over Hormuz. Analysts have also warned of a looming supply glut as exports rebound faster than expected, with Iran saying it has shipped more than 40 million barrels of oil since the US lifted its naval blockade, while Russian exports have surged to record levels, leading to a sharp buildup of barrels at sea.

Brent crude oil traded near $74 per barrel on Tuesday, recording a roughly 30% drop in Q2, which represents its largest quarterly decline since 2020. This plunge follows a surge in supply as traffic accelerated through the Strait of Hormuz after progress toward a peace deal released oil previously trapped inside the Persian Gulf. Additionally, US sanction waivers granted to Iran have introduced extra volumes into a market already trying to absorb major supply workarounds. Diplomatic efforts continue as Washington and Tehran send delegations to Doha for negotiations to end the four-month war, though Iran has ruled out direct talks. Meanwhile, Iran maintains its stance on controlling maritime traffic through the waterway. Iranian officials expressed a desire to co-regulate the strategic channel with Oman, but affirmed that Tehran will advance its own regulatory plans independently if necessary to oversee the strait's picking up flows.

Brent fell toward $73 per barrel on Tuesday, paring gains from the previous session as investors turned their focus to the resumption of US-Iran peace talks in Doha, while mixed signals from both sides continued to cloud the outlook. Tehran maintained that it intends to continue overseeing traffic through the Strait of Hormuz even if Oman opts not to participate. Under the current interim agreement, Iran will not impose transit fees for 60 days, though it leaves open the possibility of introducing charges afterward, a proposal opposed by the US, Europe, and Gulf Arab states. Shipping through the strategic waterway slowed over the weekend following renewed clashes that left two vessels damaged, although tanker operators and their crews have shown a willingness to continue transiting the route. Brent crude is on track to decline nearly 20% for the month and over 23% for the quarter as peace efforts and expectations of increased oil flows from the Persian Gulf weighed on prices.