Oil prices experienced a decline on Tuesday, as investors monitored the developments surrounding potential U.S.-Iran discussions in Doha. This comes in the wake of missile exchanges over the weekend that challenged the interim ceasefire aimed at concluding the four-month-long conflict. Brent August crude futures, set to expire on Tuesday, experienced a decline of 1.03%, equating to a decrease of 75 cents, bringing the price to $72.40 a barrel as of 0038. The more actively traded September contract experienced a decline of 0.54%, equating to a decrease of 40 cents, settling at $73.51 per barrel. U.S. West Texas Intermediate declined by 0.66%, equating to a decrease of 47 cents, settling at $70.32 per barrel.

“Investors are pricing in hopes of a positive outcome from the Doha talks, even though real normalisation of flows through the Strait of Hormuz is not yet visible,” stated Tim Waterer. “The market is cautiously hopeful but still hedging its bets until we see more tangible signs of de-escalation,” Waterer added. Iranian and Omani experts are set to engage in discussions aimed at redefining transit routes through the Strait of Hormuz in the near future, as stated by Iranian Deputy Foreign Minister Kazem Gharibabadi during an interview with state television on Monday. He further indicated that Iran intends to impede vessels operating outside the established pathways.

However, Iran’s Foreign Ministry spokesperson Esmaeil Baghaei stated that there will not be any negotiation meetings at any level with the American side in the coming days. “The meeting in Doha is going to be perhaps important, perhaps not. We’re going to find out,” U.S. President Donald Trump told in the Oval Office. The uncertainty regarding the potential meeting between the two sides underscored the precarious nature of the June 17 agreement aimed at halting hostilities, which has significantly impacted global oil flows via the Strait of Hormuz and presented a political challenge for Trump in the lead-up to the November congressional elections. Israel has refrained from participating in the U.S.-Iran peace talks and has taken steps to distance itself from the agreement.

Meanwhile, Middle East producers are advancing with the loading of oil and LNG, undeterred by recent ship attacks in the Strait of Hormuz and renewed hostilities between the U.S. and Iran, as indicated by shipping data. “Assuming Persian Gulf flows continue to recover at the same average pace as over the last two weeks… Gulf flows could return to pre-war levels of 23 million barrels per day already by early July,” analysts wrote in a note dated June 29. Traffic last week hit its highest level since the conflict began at the end of February.