Oilprice.com reports that Brent Crude futures fell below $100 per barrel again during Thursday morning trading in Europe (July 7), reversing previous gains as market participants expressed optimism about a potential agreement between the U.S. and Iran that could lead to the reopening of the Strait of Hormuz.
After a significant decline of 7% on Wednesday, Asian markets opened on Thursday with both benchmarks showing nearly 1% increases. However, investor sentiment shifted as doubts emerged regarding the immediacy of the U.S.-Iran deal, which appeared more uncertain than earlier indications suggested. The ongoing blockade at the Strait of Hormuz, coupled with dwindling global inventories, particularly in the U.S., has led to a more cautious approach among bearish traders.
The decline in prices had already moderated towards the end of Wednesday’s trading session after U.S. President Donald Trump indicated that it was “too soon” for direct discussions with Tehran. Meanwhile, Iranian officials highlighted that significant disagreements, particularly concerning Iran’s nuclear program, remained unresolved.
During Thursday morning trading in Europe, both Brent and WTI crude prices experienced a decline of approximately 2%. The international benchmark, Brent, fell by 1.8% to $99.45, while the U.S. benchmark, WTI, decreased by 2% to $93.18.
Recent reports indicate that the U.S. has submitted a one-page memorandum proposal that could facilitate a gradual reopening of the Strait of Hormuz along with the lifting of the blockade on Iranian ports. Iran has yet to review this proposal and provide a response.
No agreement has been reached regarding new mediated discussions, including those related to Iran’s nuclear program.
According to strategists Warren Patterson and Ewa Manthey from ING, Wednesday’s sell-off “partly unwinds the conflict-driven rally in energy prices, but losses were moderated as the market remains cautious.” They emphasized that U.S. crude inventories continue to tighten, with buyers increasingly relying on U.S. supplies to compensate for disrupted Middle Eastern production.
By Tsvetana Paraskova for Oilprice.com
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