Global oil prices posted modest gains on Wednesday after two days of sharp declines, as investors continued to monitor diplomatic efforts to ease tensions between the United States and Iran and restore normal shipping through the Strait of Hormuz.
Brent crude futures rose 31 cents (0.39%) to $79.67 per barrel, while US West Texas Intermediate (WTI) crude gained 11 cents (0.15%) to $75.88 per barrel.
The slight rebound follows heavy losses earlier in the week. On Tuesday, comments from Qatari officials suggesting progress in mediation efforts to end the conflict weighed on oil prices. However, Iran rejected US President Donald Trump’s assertion that negotiations were already underway.
Brent crude settled below $80 per barrel on Tuesday for the first time since July 13, reflecting growing optimism that diplomatic efforts could reduce geopolitical risks.
According to analysts at IG, a key unresolved issue remains the future of the Strait of Hormuz, with uncertainty over whether Iran will seek to retain a degree of control over the strategic waterway and whether the United States will oppose such an arrangement.
Brent crude had fallen more than 5% on Tuesday, extending losses from Monday as hopes of a negotiated settlement strengthened. Before the conflict, nearly 20% of the world’s oil and liquefied natural gas (LNG) shipments passed through the Strait of Hormuz, making the waterway one of the world’s most critical energy transit routes.
Qatar’s Emiri Office said that US President Donald Trump and Qatar’s Emir Sheikh Tamim bin Hamad Al Thani discussed efforts to bridge differences between Washington and Tehran during a phone conversation on Tuesday, with the aim of improving prospects for a lasting agreement.
While President Trump said on Monday that discussions with Tehran had begun and described the situation as Iran’s “last chance” to reach a deal, Iranian officials insisted that no negotiations with the United States were taking place.
Investors are also awaiting the latest US Energy Information Administration (EIA) inventory report, scheduled for release later on Wednesday.
According to market sources citing data from the American Petroleum Institute (API), US crude oil inventories increased by approximately 2.7 million barrels in the week ending July 31. Gasoline inventories also rose, while distillate fuel stocks declined.
Despite the recent recovery in crude prices, global oil benchmarks remain well below the $126 per barrel levels reached earlier during the conflict, suggesting that markets have become more optimistic about the possibility of a diplomatic resolution.
