On 1/7, Brent crude oil prices fell nearly 2% to 71.5 USD a barrel. US WTI crude dropped 1.3% to 68.5 USD. Both benchmarks reached their lowest levels in four months. Prices continued to decline by nearly one US dollar this morning.
The market declined due to investor optimism regarding peace talks between the US and Iran, which eased concerns over oil supply. US President Donald Trump commented that the discussions between the two nations in Qatar were "very good".
"The progress of negotiations in Qatar is viewed as positive, contributing to further declines in fuel prices, which could continue", stated Ole Hansen, an analyst at Saxo Bank.
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Brent oil price movements over the past year. Chart: Trading Economics
The US-Iran discussions stem from a memorandum of understanding and progress achieved at a conference in Switzerland in 6/2026. This memorandum outlines a ceasefire agreement across all fronts, the reopening of the Strait of Hormuz, and establishes a 60-day period for both parties to negotiate on the nuclear program, ultimately working towards a lasting long-term agreement.
"Investors increasingly anticipate a rise in crude oil volume transiting the Strait of Hormuz. The market signals that once this period concludes, all obstacles will be removed, allowing the world to produce more oil than ever", explained Phil Flynn, a senior analyst at Price Futures Group.
The volume of oil tankers transiting the Strait of Hormuz is recovering. US Vice President JD Vance reported that oil flow through this waterway has returned to pre-conflict levels, but he did not provide specific data.
During QII, Brent oil prices experienced a decline of approximately 45 USD a barrel, marking the sharpest fall since the 2008 global financial crisis. Concurrently, US crude oil dropped by around 31 USD, its most significant decrease since the Covid-19 pandemic triggered a collapse in global oil demand.
In the US, crude oil inventories fell by 3.8 million barrels last week, reaching 408.4 million, the lowest level since 9/2018. This decline was attributed to increased demand from domestic refineries in anticipation of the 4/7 Independence Day holiday, as reported by the US Energy Information Administration (EIA).
Reuters sources indicate that the Organization of the Petroleum Exporting Countries and its allies (OPEC+) will likely continue to increase their production target for august when the group convenes this sunday.
Ha Thu (according to Reuters)
