Oil prices were heading today for their biggest quarterly loss since the Covid-19 pandemic in early 2020, with investors eyeing potential US-Iran talks in Doha amid a strained interim ceasefire in the four-month-old war.
Brent futures rose 3 cents to $73.18 a barrel at around 3pm GMT, while US West Texas Intermediate crude fell 30 cents, or 0.4%, to $70.45 a barrel.
Both crude benchmarks were close to where they were trading on February 27, the day before the start of the US-Israeli war on Iran, when Brent closed at $72.48 a barrel and WTI closed at $67.02.
“I wouldn’t say the market has priced out a risk premium, but previously stranded ships have become available with the increase in ships moving out of the Gulf, creating a temporary wave of new supply,” UBS analyst Giovanni Staunovo said.
Iranian and US negotiating teams were due in Doha this week, but Iran said yesterday no meeting had been scheduled as weekend missile fire from both sides tested the interim ceasefire to end the war.
Iranian and Omani experts will start talks on redefining transit paths through the Strait of Hormuz in the coming days, Iranian Deputy Foreign Minister Kazem Gharibabadi told state TV, adding that his country will try to obstruct vessels outside defined paths.
However, Iran’s Foreign Ministry spokesperson Esmaeil Baghaei said there will not be any negotiation meetings at any level with the American side in the coming days.
The uncertainty over whether the two sides would meet highlighted the fragility of a June 17 agreement to pause fighting that has disrupted global oil flows through the Strait of Hormuz and posed a political challenge for US President Donald Trump ahead of November’s congressional elections.
Morgan Stanley cut its 2027 Dated Brent forecast by $5 a barrel, to $75 a barrel in the first half of the year and $70 a barrel in the second half, citing expectations of a build-up in OECD commercial oil inventories.
Morgan Stanley said it now models an implied global oil market surplus of 4.8 million barrels per day in 2027.
Meanwhile, Iraq’s SOMO has offered wide discounts to its official selling prices to encourage term buyers to lift Basrah crude from its terminal inside the Middle East Gulf in July, according to trade sources and a document reviewed by Reuters.
