Oil prices declined on Wednesday, extending losses from earlier in the week and trading near four-month lows, as market sentiment improved over the potential resumption of normal shipping activity through the Strait of Hormuz following disruptions linked to the Iran conflict.
Brent crude futures fell 37 cents, or 0.5 percent, to $76.71 per barrel at 00:43 GMT, while U.S. West Texas Intermediate (WTI) crude dropped 36 cents, or 0.5 percent, to $72.85 per barrel. Both benchmarks had already fallen about 1 percent on Tuesday, reaching their lowest levels since early March.
Market pressure intensified this week after Washington issued a 60-day sanctions waiver allowing Iran to resume limited oil sales following preliminary diplomatic talks, alongside easing geopolitical tensions in parts of the Middle East.
Analysts said expectations of improved oil flows through the Strait of Hormuz weighed on prices. A Mitsubishi UFJ Research and Consulting economist noted that crude was pressured by hopes of reduced tensions between the United States and Iran, with the potential for shipments to normalize through the key shipping route.
Diplomatic developments between Oman and Iran regarding maritime navigation in the Strait of Hormuz also supported expectations of improved supply conditions, although uncertainty remains over long-term stability of any agreement.
Additional market focus remains on whether oil exports from the region can fully normalize and how quickly stranded tankers will be cleared.
Reports indicate that several large vessels remain delayed in the strait, while evacuation efforts for thousands of seafarers in the Gulf are underway following a ceasefire arrangement.
Meanwhile, U.S. crude inventories are estimated to have fallen last week, with industry data suggesting a decline of around 765,000 barrels, though analysts had expected a much larger draw.
Despite short-term volatility, analysts said further progress in nuclear negotiations and regional stability could push oil prices closer to pre-conflict levels.
