Oil prices moved higher on Wednesday as uncertainty surrounding diplomatic efforts between the US and Iran renewed concerns about oil supplies from the Middle East, prompting traders to remain cautious despite signs of improving exports.
Brent crude futures gained 33 cents, or 0.45 percent, to trade at $73.28 a barrel. US West Texas Intermediate (WTI) crude also climbed 34 cents, or 0.49 percent, reaching $69.84 a barrel during early trading.
The latest gains came after hopes for a quick diplomatic breakthrough faded. Senior US representatives travelled to Qatar for talks linked to the Iran conflict, but Iranian officials were expected to communicate through mediators rather than hold direct discussions. The lack of face to face negotiations raised doubts over how quickly tensions could ease.
Market analysts said traders remain focused on the security of oil shipments through the Strait of Hormuz, one of the world’s most important energy routes. Although shipping activity has improved since the conflict eased, confidence has not fully returned.
According to Vandana Hari of Vanda Insights, the passage through the Strait of Hormuz is becoming more active again, but conditions remain uneven and difficult to predict. She said oil prices may struggle to move lower unless Washington and Tehran reach a clearer understanding that reassures the market.
Oil prices have already seen major swings this year. During the second quarter, Brent crude recorded its biggest quarterly decline since the 2008 global financial crisis, while US crude posted its largest quarterly drop since the demand collapse caused by the COVID-19 pandemic in 2020. Those losses followed progress towards reducing tensions in the Middle East after prices had briefly surged during the conflict.
A Reuters survey released on Tuesday also showed analysts lowered their average oil price forecasts for 2026 for the first time since the Iran conflict began. The revised outlook reflected growing confidence that the reopening of the Strait of Hormuz could reduce the risk of long lasting supply disruptions.
Meanwhile, fresh data from the American Petroleum Institute added support to prices. Industry figures showed US crude oil inventories fell by 6.1 million barrels last week, while gasoline stockpiles also declined, suggesting fuel demand remained firm. Investors are now waiting for official inventory figures from the US Energy Information Administration later on Wednesday, which could offer further direction for oil markets.
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