Progress in negotiations between Iran and Oman reduces geopolitical risk premium in oil prices, pressuring WTI below $80.40.
West Texas Intermediate crude fell 1.28% to $80.40 on Tuesday after Qatar reported advanced talks between Iran and Oman over the Strait of Hormuz. The benchmark reversed earlier gains as regional tensions eased, lowering the risk premium embedded in oil prices.
WTI had previously risen amid uncertainty over the strait’s reopening, a critical chokepoint for nearly 20% of global oil supply. Iran’s demands—including sanctions relief and war reparations—had fueled volatility, while U.S. statements added to market unease.
Qatar’s Foreign Ministry said negotiations reached a “critical juncture,” with positive feedback from both Tehran and Muscat. The comments raised hopes for normalized maritime traffic, weighing on oil prices.