Oil slides after Gulf diplomatic talks ease Hormuz supply fears
Diplomatic contacts over the Strait of Hormuz eased immediate supply fears and pushed Brent to about $84 and WTI to about $79 per barrel.
Prices of oil on world markets were broadly lower from the recent surge of optimism over a possible easing of tensions in the Persian Gulf. According to available data, Brent crude from the North Sea fell to around $84 a barrel, while U.S. WTI traded around $79 — its lowest level in more than a week.
The market impetus came after talks held by Iranian foreign minister Abbas Araghchi with the foreign ministers of Saudi Arabia and Oman, and the main topic was the security of navigation through the Strait of Hormuz following recent clashes between Iran and the U.S.
Proposal for a regional mechanism
According to available information, Oman proposed forming a joint regional mechanism to manage transits through the strait. The model would allow Iran to collect voluntary transit fees from ships, and the initiative, it is reported, received support from several countries in the Persian Gulf — a factor investors read as reducing the risk of massive supply disruptions.
Despite diplomatic signs of removing immediate dangers, security remains uncertain: Saudi Arabia said its air defenses intercepted drones headed toward oil infrastructure, and the Yemeni Houthis claimed responsibility for the attack on the East–West gas pipeline.
U.S. President Donald Trump said Washington is holding, as he called them, "good talks" with Tehran, but added that the possibility of new military strikes is not ruled out if negotiations do not yield the desired result. Iranian authorities warned they would respond to any new attack.
Analysts point out that markets are currently more focused on the risk premium associated with transit through the Strait of Hormuz — through which roughly one-fifth of global oil trade is transported — but they still warn that incidents could keep volatility elevated in the coming days.
Photo: Archive
