Oil prices rise as breakdown in Iran-US talks raises supply concerns

NEW DELHI: Oil prices rose on Wednesday amid fresh worries that the collapse of discussions between Iran and the United States for a final agreement to end their conflict could prolong supply disruptions in the key Middle East producing region.

Brent futures rose 33 cents, or 0.45pc, to $73.28 a barrel at 0339 GMT, while US West Texas Intermediate (WTI) crude climbed 34 cents, or 0.49pc, to $69.84 a barrel.

Patchy recovery in Hormuz

“Hormuz continues to reopen, but it’s patchy, unpredictable, and not fully transparent,” said Vandana Hari, founder of oil market analysis provider Vanda Insights.

“Unless there is a fresh understanding between Washington and Tehran, the market may wait and watch for sustained peace and quiet before crude resumes bearish momentum.”

US President Donald Trump’s son-in-law Jared Kushner and envoy Steve Witkoff arrived in Doha for what the White House described as “high-level” talks on Tuesday.

However, Iran and host Qatar said they would meet with mediators rather than the Iranians directly. Qatar’s Prime Minister Sheikh Mohammed bin Abdulrahman al-Thani was among those who met Witkoff and Kushner.

Sharp quarterly losses

Brent crude has fallen by around $45 a barrel between the first and second quarters of this year, its largest quarterly loss since the 2008 financial crisis. US crude futures dropped by around $31, their biggest quarterly decline since 2020, when the COVID-19 pandemic crushed global oil demand.

The declines followed progress toward ending the Middle East conflict, which had earlier triggered sharp gains.

Analysts have cut their 2026 oil price forecasts for the first time since the war began, after five straight monthly increases, as the reopening of the Strait of Hormuz eased concerns over prolonged supply disruptions, a Reuters poll showed.

US Vice President JD Vance said Iran would be prevented from charging tolls through the strait. Tanker traffic through the critical waterway has started to recover, with Vance claiming that oil flows had returned to pre-war levels.

Meanwhile, US crude oil inventories fell by 6.1m barrels in the week ended June 26, while gasoline stocks also declined, according to market sources citing American Petroleum Institute data. Official figures from the US Energy Information Administration are due later on Wednesday.