Oil prices slip as markets track Strait of Hormuz flows post talks

Oil prices slipped slightly on Tuesday, continuing losses from the previous day, as investors looked for clearer signs of progress in restoring crude oil flows through the Strait of Hormuz after US-Iran peace talks.

Brent crude futures fell by 20 cents, or 0.3%, to $77.70 per barrel, while US West Texas Intermediate dropped to $73.74 per barrel, down 12 cents, or 0.2%, at 0323 GMT.

Prices had already fallen more than 3% on Monday after the United States granted Iran a 60-day sanctions waiver following early peace talks. The decline also came as officials reported a pause in tensions in Lebanon under the broader agreement.

Last week, the deal had appeared uncertain after US President Donald Trump warned that the war could restart if Iran disrupted shipping through the Strait of Hormuz, following Tehran’s claim that the key waterway had been closed.

“There remains a prevailing dose of market scepticism, rooted in deep-seated mistrust between Washington and Tehran, suggesting that any return to pre-war oil prices is likely to be delayed rather than immediate,” said Tim Waterer, chief market analyst at KCM Trade.

Trump said in a post on Truth Social on Monday that Iran will agree to allow weapons inspections to ensure “nuclear honesty.”

“If Iran doesn’t live up to their agreement, or if they’re not behaving, I will do what I have to do,” Trump later told reporters.

“The market had priced in optimism around the roadmap and potential Strait of Hormuz reopening, but traders are now taking a more measured approach as they await concrete evidence that the deal will hold and traffic will normalise,” Waterer added.

Shipping activity also showed some recovery, as two crude oil tankers carrying nearly 2 million barrels passed through the Strait of Hormuz on Monday, according to ship-tracking data. This suggests that oil flows are gradually improving after weaker movement over the weekend due to security concerns.

Separately, US crude stocks in the Strategic Petroleum Reserve fell to 331.2 million barrels last week, the lowest level since June 1983, according to Department of Energy data, as supplies tightened following the US-Iran tensions.