Oil prices fell for a third straight session on Wednesday, extending this week’s sharp losses as traders watched for signs of progress in diplomatic efforts aimed at ending the Iran conflict and reopening the Strait of Hormuz.
Brent crude dropped 92 cents, or about 1.2 percent, to $78.44 a barrel in early trade. The global benchmark has now lost more than 12 percent this week. US West Texas Intermediate (WTI) crude also declined, falling $1.07, or 1.4 percent, to $74.70 a barrel after shedding more than 11 percent over the same period.
The latest fall came after Qatar said mediators were making headway in efforts to end the conflict, raising hopes that tensions in the region could ease. Those comments encouraged investors to reduce the risk premium that had driven oil prices sharply higher in recent weeks.
However, uncertainty remains. Tehran has rejected US President Donald Trump’s claim that negotiations are already taking place, leaving markets unsure about how quickly a breakthrough can be reached.
Analysts warned that while prices have retreated quickly, the situation remains fragile.
Priyanka Sachdeva, head of market insights at Phillip Nova, said the immediate geopolitical risk had faded, but supply concerns had not disappeared. She noted that if diplomacy fails and oil flows are disrupted, prices could rebound just as quickly because global inventories remain vulnerable to supply shocks.
The Strait of Hormuz remains at the centre of market attention. Before the conflict, around one fifth of the world’s oil and liquefied natural gas passed through the strategic waterway. Analysts at IG said the biggest unresolved issue is whether Iran will continue seeking influence over shipping through the strait and whether the United States will reject that position.
Adding to hopes of a diplomatic solution, Qatar’s Emir Sheikh Tamim bin Hamad Al Thani and President Trump discussed ways to narrow differences between Washington and Tehran during a phone call on Tuesday.
Meanwhile, traders are also keeping an eye on US fuel supply data. Industry figures released by the American Petroleum Institute showed US crude inventories rose by about 2.7 million barrels last week, while gasoline stocks also increased and distillate inventories declined.
Markets are now waiting for official inventory data from the US Energy Information Administration later on Wednesday, which could provide fresh direction for oil prices.
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