West Texas Intermediate (WTI) oil prices continued their downward trend for a third consecutive day, trading around $72.50 per barrel during Asian hours on Wednesday after rebounding from a three-month low of $71.94. Despite the modest recovery, WTI remains in negative territory, reflecting ongoing bearish sentiment in the market [1].
The recent decline in crude oil prices is attributed to a series of geopolitical and supply-side developments. A growing number of commercial tankers have resumed passage through the Strait of Hormuz, following breakthroughs in US-Iran peace negotiations. The International Maritime Organization (IMO) confirmed it has received crucial security guarantees, which are expected to enable hundreds of trapped vessels to exit the Persian Gulf and facilitate the evacuation of thousands of stranded seafarers [1].
On the supply front, the International Energy Agency (IEA) reported a sharp recovery in UAE oil exports for early June, reaching nearly 85% of pre-conflict levels by utilizing pipelines, storage hubs, and alternative shipping corridors. Additionally, global oil supply expectations were further buoyed by a new 60-day US waiver allowing international buyers and American refiners to legally purchase Iranian crude and refined products [1].
Diplomatic efforts continue, with Iran and Oman initiating talks on a collaborative management framework for the Strait of Hormuz. However, the possibility of new passage fees has sparked market anxieties, as Tehran may impose additional charges on shipping lines. Despite the diplomatic progress, the long-term stability of the peace accord remains uncertain. Iran’s chief negotiator emphasized that the strategic waterway will remain under Iranian oversight and will not revert to its pre-war status. Meanwhile, Washington is hosting negotiations between Israel and Lebanon aimed at brokering a ceasefire with Iran-backed Hezbollah forces [1].
The geopolitical outlook is further complicated by conflicting statements on Iran's nuclear compliance. US President Donald Trump claimed Tehran had "fully and completely" agreed to reopen its facilities to international nuclear inspectors, but Iranian Foreign Minister Abbas Araghchi countered that substantive negotiations over the nuclear program have not yet begun [1].
CONCLUSION
WTI oil prices remain under pressure due to increased supply and easing geopolitical tensions, despite a brief rebound from recent lows. Market sentiment is cautious, with ongoing diplomatic negotiations and uncertainties over the durability of peace agreements and Iran's nuclear program continuing to influence oil price dynamics.