Oil prices fall further on M.East diplomacy hopes

Oil prices continued to drop on Thursday, marking the fourth consecutive decline as markets remained hopeful for increased Middle Eastern supplies. According to a report, Iran and Oman have reportedly reached an agreement on commercial shipping routes through the Strait of Hormuz, though Iran cautioned that the agreement might not lead to an immediate reopening of the passage.

West Texas Intermediate crude futures dropped by 0.5% to $81.83 per barrel by 19:51 ET (23:51 GMT), after losing around 6% over the past three sessions. The decline in crude prices persisted despite the United States imposing stricter sanctions on Iran, with Tehran strongly opposing the measures and threatening retaliation. However, there are indications of some improvement in U.S.-Iran relations.

Russian state media has reported that Iran and the U.S. have reached a new ceasefire deal, which is expected to be announced in the coming days. Additionally, Pakistan – a key regional mediator – has signaled progress in peace talks with Iran. Despite these positive developments, shipping data revealed that flows through Hormuz are still only a fraction of pre-war levels.

The Strait of Hormuz, which once supplied approximately 20% of the world's crude prior to the conflict, has become a significant point of contention in the U.S.-Iran war. Iran has accused the U.S. of obstructing an agreement with Oman to reopen the Strait of Hormuz, as per local media reports on Wednesday.