West Texas Intermediate crude fell more than 2% to $80.49 a barrel on Wednesday after Iran and Oman said they discussed a temporary deal to reopen shipping through the Strait of Hormuz. The losses mark a fourth straight day of declines for the U.S. benchmark, as diplomatic signals from Pakistan, Russia and Washington add to bets that tensions in the Gulf are easing.
Prices extend a four-day slide
Oil prices fell further on Wednesday, with West Texas Intermediate's October contract falling more than 2% to $80.49 a barrel. Brent crude's October contract also slipped 2% to $86.75 a barrel. If the declines hold, it will mark the fourth day of losses for WTI and the third for Brent, according to Dow Jones Market Data.
WTI is down nearly 7% over the past five days, and Brent has fallen 9% in the same stretch.
Iran and Oman float a temporary Hormuz corridor
The declines followed talks between Iran's and Oman's foreign ministers on a temporary reopening of the Strait of Hormuz, which has been effectively closed since February. Seyed Abbas Araghchi and Sayyid Badr bin Hamad Al Busaidi said the plan would include a temporary shipping pathway and a joint commitment to clear mines from the strait, a precursor to a permanent arrangement to administer the waterway.
President Trump wrote in a Truth Social post that the U.S. Navy had removed or detonated all remaining mines in the strait, warning that any vessel placing new explosives would be destroyed immediately. Axios reported that Secretary of State Marco Rubio said the U.S. was not planning strikes on Iran for now, but that the White House would keep its focus on economic sanctions.
Pakistan and Russia signal a broader de-escalation
Momentum for a deal built after Pakistan's army chief, Asim Munir, carried a proposal to Iranian leaders yesterday that included removing the U.S. naval blockade and gradually lifting sanctions under the Islamabad Memorandum of Understanding. Trump spoke with Munir ahead of the trip, and Pakistani officials described the visit as fruitful.
Russia's RIA Novosti also reported that the U.S. and Iran would announce a new ceasefire agreement in the coming days that would include freedom of shipping via Hormuz. The U.S. has also started returning diplomats to Gulf states it evacuated during the war.
Traders eye sanctions relief and support near $78
Brent crude futures for October delivery declined 3.01% to $85.91 a barrel, CNBC reported. U.S. West Texas Intermediate futures also dropped 3.11% to $79.80 per barrel. AJ Bell's Dan Coatsworth said sanctions on Tehran had come in milder than markets expected: According to CNBC: "U.S. sanctions on Iran were less severe than anticipated".
Crude oil traders are now watching whether prices hold above the 78.00 support level, where a break lower could extend the drop toward the 68.00 zone. A rejection near the 80.00 handle, however, could invite buyers back in.
Sources: MarketWatch, CNBC, InvestingLive
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