Global oil prices declined for a second consecutive session as markets reacted to expectations of renewed diplomatic talks between the United States and Iran, easing some of the geopolitical risk premium in crude markets.
Brent crude fell to $94.63 per barrel, while West Texas Intermediate (WTI) dropped to $90.58, extending sharp losses from the previous session.
Prices weakened as investors anticipated that potential peace negotiations could eventually restore disrupted supply flows from the Middle East, particularly through the strategically critical Strait of Hormuz, where shipping remains heavily constrained.
Despite a reported ceasefire, oil movement through the strait remains significantly reduced, with vessel traffic far below normal levels. Supply uncertainty has been compounded by tightened sanctions, as the United States ends key waivers on Iranian and Russian oil exports.
Market analysts note that crude prices are increasingly driven by diplomatic signals rather than physical supply disruptions, with traders unwinding earlier war-related risk premiums on signs of potential negotiations.
However, structural supply tightness persists. Refiners are paying record premiums for alternative crude sources, while disruptions in Middle Eastern exports continue to limit global availability.
Investors are also awaiting official inventory data from the US Energy Information Administration, which is expected to provide further direction on demand and supply trends.
