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US Oil Update: Crude Steadies as Hormuz Exports Recover, US-Iran Talks Advance

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Crude oil futures held firm in after-hours trading on Thursday as crude exports through the Strait of Hormuz continued to recover and indirect talks between the US and Iran showed signs of progress, easing concerns over potential supply disruptions.

Front-month West Texas Intermediate crude futures eased 0.17% to $68.46 per barrel, while Brent futures were up 0.04% to $71.60/bbl.

Gelber & Associates said that WTI crude is trading at $68.10/bbl, down $0.48/bbl and about 0.70% over the day, as the market holds near pre-conflict levels while traders balance improving Middle East supply access against lingering demand concerns.

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.

US Strategic Petroleum Reserve inventories dropped to 325.7 mmbbls for the week ended June 26, down from 331.2 mmbbls a week ago, marking a weekly decline of 5.5 mmbbls, EIA data showed.

Saxo Bank strategists said that, combined with ongoing releases from the Strategic Petroleum Reserve and demand curtailed by recent high prices, the market remains exposed to a short-term supply glut.

On Wednesday, mediators from Qatar and Pakistan concluded separate meetings with US and Iranian negotiators in Doha, Majed Al Ansari, Qatar's foreign ministry spokesperson, said in a social media post on X.

Al Ansari said "positive progress" was made on issues related to the memorandum of understanding.

The next meeting between Iran and US negotiators will take place after the July 9 funeral processions for Iran's late Supreme Leader Ayatollah Ali Khamenei.

President Trump said on Wednesday that the US was getting along very well with Iran and that recent meetings in Qatar went well.

Trump said the two sides had very constructive meetings, "and we'll see how it develops," adding that crude prices have come down significantly, now at about $68/bbl.

Alexandre Andlauer, senior global energy analyst at Kpler, said that crude extended its post-MoU rout as accelerating Hormuz transits and clearing stranded barrels pushed Dubai deeper into contango and Brent into the mid-$70s.

However, the US and Iran have yet to iron out a permanent peace deal.

Meanwhile, traffic through the Strait of Hormuz continued despite tensions over the weekend, with Soojin Kim, a research analyst at MUFG, saying crude shipments through the waterway have recovered to over 10 million barrels per day.

Iran's military warned that interference in the Strait will receive a 'swift and decisive response'.

The Strait of Hormuz is not a "playground" for the US, but falls under the "indisputable sovereignty of the Islamic Republic of Iran," the military command said, adding that the security and stability of the key chokepoint are a red line.

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