Oil Price Today (June 30): Brent crude falls to $72/barrel as investors await US-Iran talks

Oil prices declined on Tuesday as investors awaited the outcome of possible talks between US and Iran in Doha after tit-for-tat strikes over the weekend spooked markets about the fragility of their interim peace deal and slowed down shipping in the Strait of Hormuz.

Brent crude futures dropped around 1% to $72.50 a barrel while US West Texas ‌Intermediate (WTI) crude futures ⁠fell around 0.7% to $70.28 per barrel, as seen at 7.20 am on Monday. Brent crude fell nearly 11% last week to mark its third week of loss after crude shipments through the strait rose to their highest level since the US-Israeli conflict with Iran began earlier this year.

Possible US-Iran talks in Doha

“The meeting in Doha is going to be perhaps important, perhaps not. We’re going to find out,” US President Donald Trump told reporters in the Oval Office. Iranian and Omani experts will start talks on redefining transit paths through ⁠the Strait ‌of Hormuz in the coming days, Iranian Deputy Foreign Minister Kazem Gharibabadi said on Monday, adding that his country will try to obstruct vessels ⁠outside defined paths.

However, Iran’s Foreign Ministry spokesperson Esmaeil Baghaei said there will not be any negotiation meetings at any level with the American side in the coming days. This uncertainty over whether the two sides would meet highlights the fragility of a June 17 agreement to pause fighting that has disrupted global oil flows through the ‌Strait of Hormuz and posed a political challenge for Trump ahead of November’s congressional elections.

Also read: Oil falls as investors focus on potential Iran-US talks in Doha

What lies ahead?

“Investors are pricing in hopes of a positive outcome from the Doha talks, even though real normalisation of flows through the Strait of Hormuz is not yet visible,” Reuters quoted Tim Waterer, chief market analyst at KCM Trade, as saying. “The market is cautiously hopeful but still hedging its bets until we see more tangible signs of de-escalation,” he added.

“Assuming Persian Gulf flows continue to recover at the same average pace as over the last two weeks… Gulf flows could return to pre-war levels of 23 million barrels per day already by early July,” analysts at Goldman Sachs wrote in a note dated June 29, as reported by Reuters.

Also read: Oil risks rise, but Moody’s sees India holding firm

(With inputs from agencies)

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