Oil futures gained some ground on Wednesday but remained close to their lowest since mid-July, as traders awaited weekly crude inventory data to gauge supply-demand balance.
Brent crude futures added 0.7% to $79.91 per barrel, while Murban crude futures rose 2.8% to $79/bbl.
"Brent fell 5.3% Tuesday to settle around $79 a barrel, its lowest since 10 July, as Hormuz deal optimism intensified," Saxo Bank analysts said.
They said that Brent "extended losses overnight to about $78.75 after Axios reported Washington, Tehran and Oman were nearing an agreement to reopen the strait, with a Wednesday announcement targeted."
Reports indicate that Iran and Oman have progressed discussions on a framework where ships would enter the Persian Gulf via an Iranian-controlled route and exit through an Omani-controlled route, potentially tied to the lifting of US blockades on Iranian ports.
Meanwhile, US Treasury Secretary Scott Bessent noted that a deal could materialize imminently, with some vessels already transiting the vital waterway.
However, Iran's state broadcaster clarified that any bilateral navigation agreement reached with Oman will not immediately result in the reopening of the Strait of Hormuz, several media outlets reported Wednesday.
On the supply side, data from the American Petroleum Institute showed a 2.69-million-barrel increase in US crude inventories for the week ended July 31, which also kept prices in check.
The oil market now awaits the US Energy Information Administration's petroleum inventory report, scheduled for release on Wednesday.