Oil Extends Gains

Crude oil fell below $69 per barrel on Wednesday, the lowest since February 27, as traders assessed ongoing US–Iran peace negotiations and a gradual recovery in shipping through the Strait of Hormuz. US negotiators Jared Kushner and Steve Witkoff held constructive talks in Qatar, with a senior administration official saying technical discussions with Iran are advancing as part of indirect efforts to reduce tensions over the key waterway linking Persian Gulf producers to global markets. Tanker flows are showing tentative improvement following exchanges of strikes over the weekend, but remain below pre-war levels. At the same time, Iranian exports surged past 40 million barrels following the removal of a US naval blockade, while record-breaking Russian shipments have caused a notable accumulation of seaborne inventory. However, Tehran continued to insist on maritime administrative control over the strait.

Crude oil steadied near $70 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.

Crude oil traded near $70.2 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.