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Global oil prices declined as growing optimism over the possible reopening of the Strait of Hormuz eased concerns about disruptions to crude supplies from the Middle East.
Brent crude futures slipped while US West Texas Intermediate (WTI) crude also fell, as investors reacted to reports of progress in diplomatic efforts that could restore shipping through the strategic waterway.
The Strait of Hormuz handles roughly one-fifth of the world’s oil trade, making it a critical route for global energy supplies.
Market sentiment improved after senior US officials indicated that negotiations were advancing and a deal to reopen the strait could be within reach.
The prospect of renewed oil flows reduced the geopolitical risk premium that had driven prices higher in recent months.
Despite the optimism, analysts cautioned that uncertainty remains, with key issues in the negotiations still unresolved and regional security risks persisting.
Recent attacks claimed by Yemen’s Houthi rebels and concerns over maritime security continue to weigh on the outlook.
