West Texas Intermediate (WTI) crude oil closed lower on Tuesday, as shipping through the Strait of Hormuz continues to free up previously trapped barrels.
WTI crude for August delivery closed down 1.8% to $69.50 per barrel, while August Brent crude was last seen down 0.3% to $72.92.
The drop comes as the United States and Iran hold talks in Qatar aimed at reaching a peace agreement to end the four-month conflict that has disrupted shipping through the Strait of Hormuz, the chokepoint for about one-fifth of the world's seaborne oil trade.
Tankers stranded in the Persian Gulf have resumed transiting the Strait after a pause following renewed US and Iranian strikes over the weekend. The New York Times reported that 40 ships exited the Gulf on Monday, citing data from tracking firm Kpler, up from 24 on Sunday.
The resumption of shipping through the Strait has pushed down prices by 23% over the past month and by 30% since the end of the first quarter, the largest drop since 2020.
"Oil prices traded within a relatively tight range near recent lows while remaining on track for their biggest quarterly decline since the pandemic. 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 wrote.