EMEA crude futures declined in after-hours trading on Wednesday as markets weighed progress in US-Iran peace talks in Doha and US stockpiles, which fell below earlier estimates.
Brent crude futures retreated by 2.2% to $71.33 per barrel, while Murban crude futures tumbled by 5.3% to $65.33/bbl.
Saxo Bank strategists said that crude traded little changed near recent lows as the market continued to absorb the resumption of shipping through the Strait of Hormuz, raising concerns about short-term oversupply.
President Trump said on Wednesday that the US was getting along very well with Iran and that peace negotiations in Qatar went well. The talks in Qatar come after tit-for-tat military strikes between the US and Iran over the weekend, which threatened to jeopardize a 60-day truce between the two countries.
Trump's son-in-law, Jared Kushner, and US special envoy Steve Witkoff reportedly held positive talks in Doha to ease the Middle East conflict and held technical talks as the two sides seek to agree on the flow of shipping through the Strait of Hormuz.
Iran's Deputy Foreign Minister Kazem Gharibabadi led a delegation of representatives from Iran's foreign ministry, central bank and agriculture ministry, meeting Qatar's prime minister, Sheikh Mohammed bin Abdulrahman Al Thani and holding talks with mediators, according to local media.
Gharibabadi said that working groups for the follow-up of the MoU's implementation and for negotiations towards a final agreement have been set up, "but no talks have yet taken place within these frameworks."
Soojin Kim, research analyst at MUFG, said progress in indirect negotiations has supported a gradual recovery in shipping via the Hormuz, while Iranian exports have increased following the easing of maritime restrictions.
Tanker traffic through the Hormuz has started to recover, with Vice President J D Vance reportedly saying that oil flows through the strategic waterway had returned to pre-war levels.
The Strait recorded 34 verified crossings on June 30, according to MarineTraffic, with traffic evenly balanced at 17 vessels in each direction.
However, route visibility remained "fragmented," with vessels using Iranian, Omani, International Maritime Organization, and dark or unknown routes, according to MarineTraffic.
Iranian state media said on Wednesday that a foreign container ship had run aground in the Strait after entering shallow waters outside the shipping route designated by Tehran.
On the supply front, US commercial crude oil inventories decreased by 3.8 million barrels to 408.4 mmbbls in the week ended June 26, the Energy Information Administration said in its weekly report on Wednesday.
Crude inventories are now about 7% below the five-year average for this time of year, the EIA said.
OPEC+ countries are set to agree on a further output hike from August, when the producer cartel meets on Sunday, adding supply at a time of falling prices amid the gradual reopening of the Strait of Hormuz.