Brent and WTI crude swung between gains and losses on Tuesday after Qatar said a draft resolution to the U.S.-Iran standoff over the Strait of Hormuz is circulating among negotiators, even as Iran denied that direct talks were underway. Trump warned Tehran it was running out of chances to reach a deal, while U.S. crude exports slid to an eight-month low in July.
Brent crude fell 1.8% to $82.23 a barrel by 07:45 ET Tuesday, reversing a gain of more than 2.5% earlier in the session, while WTI crude dropped 2.6% to $78.24 a barrel.
Qatar circulates a draft Hormuz deal
Qatar, a regional mediator between Iran and the United States, said language on a possible deal has been drafted and is circulating among negotiators. There is no agreement yet to hold direct talks, but a short-term resolution focused on de-escalation and reopening the Strait of Hormuz remains Doha's priority. Qatar's foreign ministry spokesperson, Majed Al Ansari, said mediators including Qatar, Pakistan and Oman are exchanging draft proposals between the two sides.
Trump and Tehran send conflicting signals
Trump said on Monday that discussions with Iran were underway. But Iranian foreign ministry spokesperson Esmaeil Baqaei said Tehran was not currently negotiating with the United States and was instead working with Oman on a route for vessel traffic through the strait. ING analysts wrote in a note: "We've been in this situation multiple times before, only to see things unravel", warning that the mismatched signals leave room for renewed escalation.
Hormuz risk clouds the supply outlook
The Strait of Hormuz is a chokepoint for crude oil shipments. It normally handles about one-fifth of global daily oil and liquefied natural gas supplies. UBS analyst Giovanni Staunovo said Middle East production has recovered from its lows but remains below pre-conflict levels, keeping the market undersupplied. Shipping traffic near Hormuz and the Bab el-Mandeb strait held largely unchanged at the start of the week.
U.S. exports slide to an eight-month low
Data released Monday showed U.S. crude exports fell to 3.66 million barrels per day in July, the lowest level in eight months, as increased Middle Eastern supply following June's short-lived ceasefire reduced demand for American crude. Goldman Sachs expects Brent to stay in an $80-$90 a barrel range until either a confirmed U.S.-Iran agreement or a significant escalation in attacks.
Sources: Commodities & Futures News, Reuters
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