Oil prices held on to gains on Tuesday as investors closely tracked upcoming US-Iran talks in Doha, with fresh disagreements over control of the Strait of Hormuz clouding hopes of a lasting resolution to the four-month conflict. Brent crude for September delivery traded above $73 a barrel after climbing 1.8% in the previous session, while West Texas Intermediate (WTI) hovered near $70 a barrel.
The latest gains came after Iran signalled it wants a greater role in managing shipping through the Strait of Hormuz, one of the world’s most critical energy chokepoints.
Iranian Deputy Foreign Minister Kazem Gharibabadi said Tehran would continue with plans to oversee traffic through the strait if Oman chose not to jointly manage the waterway, highlighting persistent differences ahead of the negotiations.
The talks are expected to begin in Doha today. While Washington has said negotiations will take place, Iran’s foreign ministry said it would only send a delegation of technical experts and ruled out direct talks, underscoring the fragile nature of the diplomatic process.
Under the current interim agreement, Iran has agreed not to levy transit fees on ships using the Strait of Hormuz for 60 days. However, the arrangement leaves open the possibility of charges being introduced later — a proposal strongly opposed by the US, European nations and Gulf Arab states.
Shipping traffic in the Strait of Hormuz slowed over the weekend after renewed hostilities saw two vessels attacked near the waterway. However, tanker movements have gradually resumed, suggesting shipping companies are becoming more willing to navigate the route despite lingering security concerns.
Oil prices have largely retraced the sharp gains seen during the conflict as expectations grow that supply disruptions will remain limited. Brent is now trading close to levels seen before the war began, reflecting optimism that crude flows through the Strait of Hormuz will continue to normalise.
Adding to the bearish supply outlook, Morgan Stanley lowered its forecasts for Dated Brent, citing the faster-than-expected reopening of the Strait of Hormuz, resilient US crude exports and subdued demand from China.
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