Oil prices experienced a slight increase in early trading on Wednesday following Iran’s announcement that it would refrain from engaging in direct discussions with U.S. representatives. This development introduces additional uncertainty to the interim ceasefire between the two parties amid the ongoing four-month conflict. Brent crude futures increased by 50 cents, representing a 0.69% rise, reaching $73.45 per barrel at 1208. Meanwhile, U.S. West Texas Intermediate crude saw an uptick of 63 cents, or 0.91%, bringing it to $70.13 per barrel. U.S. President Donald Trump’s son-in-law Jared Kushner and special envoy Steve Witkoff arrived in Doha on Tuesday for discussions characterised by the White House as “high level. However, Iran and host nation Qatar indicated that the U.S. delegation would engage with mediators rather than participate in direct discussions with Iranian representatives. Oil prices experienced a significant decline over the preceding quarter, reflecting a reduction in tensions within the Middle East.

Brent crude experienced a decline of approximately $45 per barrel from the first to the second quarter of this year, representing its most significant quarterly decrease since the 2008 global financial crisis. U.S. crude futures experienced a decline of approximately $31 during the same timeframe, marking the most significant quarterly drop since 2020, coinciding with the onset of the Covid-19 pandemic which severely impacted global oil demand. The losses followed a reversal of the significant gains that had been achieved earlier due to the hostilities, as progress towards resolving the Middle East conflict stalled. Analysts have revised down their 2026 oil price forecasts for the first time since the onset of the Iran war, marking a departure from five consecutive months of increases.

This adjustment follows the reopening of the Strait of Hormuz, which has alleviated concerns regarding potential prolonged supply disruptions, according to a poll released on Tuesday. Tanker traffic through the strategically important waterway has begun to recover, with US Vice President JD Vance stating that oil flows have reverted to pre-war levels. Nonetheless, a complete reopening of the Strait of Hormuz is anticipated to require a considerable amount of time. Coordination of vessel movements, the resumption of oil well operations, the repair of damaged infrastructure, and the establishment of agreements regarding de-mining operations will be essential. Some shipowners continue to exercise caution regarding operations in the strait and the broader Persian Gulf.

Analysts observed that global oil inventories experienced a reduction during the extended disruption to shipping through the Strait of Hormuz, indicating that recovery will require a significant amount of time. Stockpiles are likely to experience further declines prior to the influx of additional Gulf supplies into international markets. Last month, Saudi Aramco Chief Executive Officer Amin Nasser cautioned that disruptions in the Strait of Hormuz might postpone the restoration of stability to global oil markets until 2027. He stated that extended disruptions could impact almost 100 million barrels of oil supply on a weekly basis. Saudi Aramco stands as the preeminent oil producer globally.