Oil Price Today (August 4): Crude oil nears $85 as peace talks uncertainty loom after fresh attacks. What are experts saying?

Oil prices edged higher on Tuesday after suffering steep losses in the previous session, as concerns over Middle East supply risks resurfaced amid fading hopes of a diplomatic breakthrough in the U.S.-Iran conflict that has disrupted shipments.

Crude oil price on August 4

Front month Brent crude futures gained $0.71, or 0.8%, to $84.50 a barrel after tumbling 7% on Monday to their lowest level in three weeks. U.S. West Texas Intermediate (WTI) crude rose $0.61, or 0.7%, to $81 a barrel after sliding more than 5% in the previous session to a near one week low.

Oil had come under pressure after the U.S. President Donald Trump said on Sunday that he was delaying fresh strikes on Iran while talks continued to end the conflict and resolve disagreements over the Strait of Hormuz. The strategic waterway links Gulf oil producers to global markets and, before the conflict, carried energy exports equivalent to about 20% of global consumption each day.

Also read:Trump’s closest Gulf allies are frustrated with his Iran war strategy: Report

However, Iran pushed back against those claims on Monday. Foreign Ministry spokesman Esmail Baghaei said there were no negotiations with the United States underway and that no meetings had been scheduled.

The dispute over the Strait of Hormuz continues to remain at the centre of the conflict. Washington maintains that the memorandum of understanding signed in June required Iran to keep the waterway open, while Tehran argues that the agreement explicitly preserved its authority over the passage.

Shipping activity through the Strait of Hormuz between Iran and Oman has also slowed following reports of attacks on vessels. The United Kingdom Maritime Trade Operations said on Tuesday that it had received a report of an incident 20 nautical miles, or 37 km, northeast of Oman’s Al Khasab, after a cargo vessel broadcast over VHF channel 16 that it had been struck by an unknown projectile.

What are experts saying?

The outlook for crude prices will largely depend on how long the supply disruption persists. JPMorgan estimates that every additional month of disruption could push Brent prices higher by about $7 to $8 a barrel. If the disruption lasts for three months, the bank expects the average monthly Brent price to climb to around $114 a barrel.

Goldman Sachs has also warned that Brent could touch $120 a barrel if shipping disruptions through the Strait of Hormuz, the world’s most important oil transit route, continue. Even so, the bank’s base case assumes tensions in the Middle East will eventually ease.

Read more: Oil prices surge 20% in July as US-Iran war heightens Strait of Hormuz tensions

Based on that assumption, Goldman Sachs expects Brent to average $80 a barrel in the fourth quarter and $75 a barrel next year. However, the bank said the risks to its forecast remain tilted to the upside because disruptions in the Strait of Hormuz and the Red Sea could continue.

“The direction of our outlook is unchanged; the path and the timeline have shifted. We still expect oil to cool as we move into 2027, for three reasons: supply outside the conflict zone is expanding, with OPEC+ raising production targets, the UAE at record output and non OPEC barrels responding to price,” said Anindya Banerjee, Head of Commodity Research at Kotak Securities.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)