Brent crude futures were steady on Wednesday morning after closing out its weakest quarterly performance since 2020 as supply concerns eased due to reopening of the Strait of Hormuz.
The Front-month Brent futures contract held steady at $73.08 per barrel. Murban futures closed at $68.76/bbl on June 30 and were not trading by the time of publication of this oil price update.
Both contracts lost more than 20% on a month-over-month basis on June 30. On quarterly basis, Brent lost nearly 38% sequentially, while Murban dropped over 26%.
While the political gridlock clouds the timeline for a permanent peace treaty, the 60-day ceasefire remains active, enough to allow logistics through the strait. This leaves the oil market focused squarely on the growing physical oversupply, analysts said.
"Tanker vessel movements in the Strait of Hormuz still appear limited. Total tanker crossings, which include both inbound and outbound movements, are estimated at around 11 on Tuesday, down from a peak of 24 last Wednesday," ING analysts said.
"Admittedly, there has been a slight pickup in inbound tanker traffic, suggesting that shipowners are becoming increasingly confident about moving vessels into the Persian Gulf. If this trend accelerates, it becomes a clear headwind-and potentially a direct challenge-to our view that oil prices should rise from current levels," ING added.
On the geopolitical front, top US envoys Steve Witkoff and Jared Kushner have arrived in Doha for mediated talks, matching the arrival of Iranian negotiators.
However, Iran reportedly said on Tuesday that it has refused direct meetings with the US delegation.
Tehran is maintaining a firm stance that it will not enter final negotiations until current terms of the MoU are fully met, including an end to hostilities in Lebanon and the release of frozen Iranian assets.