Crude futures were headed for a monthly decline of more than 20% on Tuesday as concerns around a supply glut emerged after the Strait of Hormuz reopened for shipping.
Brent futures held steady at $73.20 per barrel while Murban futures gained 1.2% to $70/bbl.
"Oil prices traded within a relatively tight range near recent lows while remaining on track for their biggest quarterly decline since the pandemic," Saxo Bank analysts noted.
Both contracts lost more than 20% on a month-over-month basis up to the time of publication of this article on June 30, and on a quarterly basis the Brent futures contract has lost nearly 38%.
The underlying catalyst for the steep fall is a notable pick-up of commercial shipping flows through the Strait of Hormuz.
"Flows through the Strait of Hormuz continue to accelerate, prompting warnings from Morgan Stanley that the release of previously stranded barrels could create a near-term supply glut and put additional downward pressure on prices," Saxo Bank analysts noted.
On the diplomatic front, US Secretary of State Marco Rubio issued a stern warning that Washington considers any maritime tolls or transit fees imposed on ships passing through the waterway to be completely unacceptable.
In response, a senior Iranian official reportedly reaffirmed Tehran's resolve to retain regulatory control over the Strait, keeping risk premiums sticky despite the broad downward price trend.
Meanwhile, conflicting narratives emerged regarding diplomatic engagement in Doha, Qatar.
US President Donald Trump stated in a social media post that both sides were poised to hold fresh talks on Tuesday following a volatile weekend of hostilities, describing the Doha gathering to reporters at the White House as potentially important.
However, Iran's Deputy Foreign Minister for Legal and International Affairs, Kazem Gharibabadi, refuted this, stating that no technical working group meetings or direct talks with US officials are scheduled for this week.