Oil Prices Rise as US-Iran Peace Talks Face Fresh Uncertainty

CBC

Oil prices.

Oil prices edged higher on Wednesday as uncertainty over the outcome of peace negotiations between the United States and Iran continued to support a geopolitical risk premium, despite record-high U.S. crude production highlighting plentiful global supply.

U.S. West Texas Intermediate (WTI) crude futures gained 0.73% to trade at $70.01 a barrel, while Brent crude futures had not yet opened for trading.

Market participants remained attentive to developments in Doha after Iran said it would not engage in direct talks with senior U.S. officials who had travelled to the region. Instead, Tehran maintained that any discussions would take place indirectly through intermediaries at a technical level. The move dampened expectations of a swift agreement that could turn the two-week ceasefire into a more durable peace settlement.

The latest gains followed a sharp retreat in oil prices after the outbreak of the conflict involving Iran. Brent crude declined by around 38% in the second quarter, reversing a roughly 94% surge recorded in the first quarter and marking its steepest quarterly fall since the record 66% drop in the first quarter of 2020. The global benchmark also lost about 21% in June, following a 19% decline in May, its largest monthly fall since March 2020, as fears of prolonged supply disruptions through the Strait of Hormuz subsided.


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