Brent Falls Below $71 as US-Iran Peace Talks Progress
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- Brent crude fell more than 1% on Thursday to below $71 a barrel, with August futures at $70.82 as of 04:30 GMT — the lowest level since February 27, the day before the war started, and down more than 38% from the post-war peak of $126 reached on April 30.
- Qatar, acting as mediator, announced that US and Iranian officials had made "positive progress" in indirect talks on implementing their memorandum of understanding (MoU) to permanently end the war.
- Trump cast the talks in a positive light on Wednesday, saying "the denuclearisation of Iran is moving along well," while The Hindu's cross-coverage echoed the diplomatic optimism with reports of "very good" meetings in Doha.
- Vandana Hari of Vanda Insights attributed the price slide to a steady uptick in Gulf oil flows and "cautiously optimistic geopolitical sentiment," noting the two sides appear to have "backed off confrontation" over the interim Hormuz transit regime — at least temporarily.
- Strait of Hormuz traffic is recovering slowly but remains far below normal — 40 vessels transited Tuesday, up from 22 on Sunday, yet still well short of the roughly 130 daily crossings recorded before the war, with at least 49 attacks on commercial vessels recorded since hostilities began.
- Neil Crosby of Sparta Commodities cautioned that the price drop reflects only "partial conviction" that hostilities are finished, warning the situation is "by no means stable or sustainable" and that global crude importers returning to the market could yet swing prices.
- Iran agreed in its June 17 MoU to make "best efforts" to arrange safe passage through the strait, but has since repeatedly claimed the sole right to control movement through the waterway — a tension left unresolved by the latest talks.
Why it matters: Oil markets are pricing in a diplomatic breakthrough: Brent's 38% collapse from its April peak directly reflects bets that the war's end will restore Gulf supply. But with Iran still asserting sole Hormuz control, 49 recorded attacks on shipping since the war began, and analysts warning prices are not yet "out of the woods," any reversal in Doha would slam the door on $71 crude as quickly as it opened.
