Oil prices plunge over 12% in just one week
Photo: Oil prices fell by over 12% over the week (Getty Images)
Oil prices continue to fall amid possible progress in negotiations between the US and Iran, according to Reuters.
Oil prices continued to fall following a sharp drop during the previous two trading sessions, as investors await word on whether efforts to end the war with Iran and restore traffic through the blocked Strait of Hormuz will succeed.
As of today, Brent crude futures fell by 92 cents, or about 1.2%, to $78.44 per barrel. Over the past week, they have fallen by more than 12%.
US West Texas Intermediate (WTI) crude oil futures lost $1.07, or 1.4%, dropping to $74.70 per barrel, and have fallen by more than 11% this week.
Qatar stated on Tuesday, August 4, that mediators are making progress in efforts to end the war, which is leading to lower oil prices, although Tehran denies US President Donald Trump's claim that negotiations are ongoing.
Yesterday, the price of Brent crude closed below $80 per barrel for the first time since July 13, falling by more than 5%.
"If diplomatic efforts fail and physical supply is ultimately affected, the current pullback could prove short-lived, with tighter inventories amplifying the impact of any future supply shock," notes Priyanka Sachdeva, head of market research at Phillip Nova.
Before the war with Iran began, about 20% of the world’s oil and liquefied natural gas passed through the Strait of Hormuz. In March, prices rose by 50%.
"The main sticking point appears to be whether Iran will continue to insist on a degree of control over the waterway, and whether the US will stand its ground and refuse that outcome," according to analysts at IG.
Oil prices and US-Iran negotiations
On August 4, oil prices surged as the possibility of a diplomatic resolution to the conflict between the US and Iran remains in doubt.
At the same time, Axios reported that the US intends to announce an agreement with Iran as early as today that would reopen the Strait of Hormuz.
However, the agreement itself will be temporary, lasting 60 days, land concluded between Oman and Iran. Moreover, the agreement will include many conditions that will satisfy some of Tehran's demands regarding control over the strait.
US President Donald Trump stated that all straits in the Middle East that were closed following the war with Iran will soon be reopened. According to him, this could happen either after negotiations or after a military strike.
