Crude oil futures were little changed in after-hours trading on Tuesday as markets weighed signs of potential progress in US-Iran peace negotiations against expectations of a looming supply glut later in the year.
Front-month West Texas Intermediate crude futures slipped 0.9% to $70.10 per barrel, while Brent futures eased 0.3% to $72.92/bbl.
Soojin Kim, research analyst at MUFG, said oil prices are likely to remain under downward pressure as Gulf supply recovers and the risk premium continues to fade, though uncertainty could keep volatility elevated.
More ships are transiting the Strait of Hormuz after traffic slowed over the weekend after two ships were hit, with vessel tracking data showing an increase in crossings, although they remain below pre-war levels.
Warren Patterson, head of Commodities Strategy at ING, said that oil flows averaged about 7 million barrels per day over the past week, compared to pre-war flows of 20 million b/d.
However, Patterson said they did not need to see Strait of Hormuz oil flows return to 20 million b/d for the Persian Gulf oil supply to fully recover.
Kpler analysts also said that tanker markets are adjusting to the partial reopening of the Strait, with Middle East Gulf VLCC rates easing as inbound ballasters return to the region, reducing tightness following a period of disruption.
Iran has reiterated its determination to control maritime traffic through the Hormuz, with Ebrahim Azizi, head of Parliament's National Security and Foreign Policy Committee, reportedly saying that the strategic waterway is an "inseparable" part of Iran's national sovereignty.
Kim said that Iran reiterated its intention to oversee traffic through the Strait, highlighting that differences over the energy chokepoint's future governance remain unresolved.
Meanwhile, US envoy Steve Witkoff and Trump's son-in-law Jared Kushner are in Doha as part of ongoing peace negotiations between the US and Iran and as the two sides try to temper tensions after tit-for-tat attacks over the weekend.
Trump told reporters at the White House on Monday that the Doha meeting "is going to be perhaps important, perhaps not," adding that they were "going to find out."
However, Iranian officials denied that talks between the two sides were scheduled for this week, noting that an Iranian technical delegation's visit to Qatar this week was unrelated to US officials' visit to the country.
Iranian Foreign Ministry spokesman Esmaril Baghaei said Iran has not yet entered the phase of final agreement negotiations and will not do so until the US begins implementing five key provisions of the MoU.
On the demand front, the Energy Information Administration earlier in June projected that global crude demand will fall by 1.1 million b/d in 2026, while the International Energy Agency slashed its demand outlook to about 1.1 million b/d.