Oil prices are on track for their biggest quarterly decline since the early months of the Covid-19 pandemic in 2020, as markets remain focused on the possibility of renewed US-Iran talks and the fragility of a ceasefire agreement, according to a Business-Today report.
Price movements and key levels
Brent crude futures for August delivery rose 12 cents, or 0.16%, to $73.27 a barrel by 0959 GMT on Tuesday, the report stated. Despite the daily gain, the contract was headed for a third consecutive monthly decline and has fallen about 20% so far in June. The more actively traded September Brent contract gained 32 cents, or 0.43%, to $74.23 a barrel.
US West Texas Intermediate (WTI) crude for August delivery rose 27 cents, or 0.38%, to $71.02 a barrel, according to the report. However, the benchmark remained on course for a second straight monthly loss, down around 19% in June as reported by Reuters.
| Contract | Price (USD/bbl) | Change | Monthly Performance |
|---|---|---|---|
| Brent Aug | $73.27 | +$0.12 (+0.16%) | Down ~20% in June |
| Brent Sep | $74.23 | +$0.32 (+0.43%) | N/A |
| WTI Aug | $71.02 | +$0.27 (+0.38%) | Down ~19% in June |
Both benchmarks have now returned close to their pre-war levels, the report noted.
Geopolitical uncertainty: US-Iran talks and the ceasefire agreement
Markets remain focused on the possibility of diplomacy between Washington and Tehran. According to the Business-Today report, US President Donald Trump said Iran had requested talks and a meeting could take place in Doha. However, Iranian officials denied that any negotiations had been scheduled.
Iranian deputy foreign minister Kazem Gharibabadi said on Monday that Iranian and Omani experts would soon begin discussions on redefining transit routes through the Strait of Hormuz, adding that Tehran would seek to restrict vessels operating outside designated shipping lanes, the report stated.
In contrast, Iran's foreign ministry spokesperson Esmaeil Baghaei dismissed reports of imminent talks with Washington, saying there would be "no negotiation meetings at any level with the American side in the coming days."
The uncertainty surrounding possible negotiations has highlighted the fragility of the June 17 agreement aimed at halting hostilities, restoring shipping through the Strait of Hormuz and stabilising global energy markets, according to the report. The conflict has also emerged as a political challenge for Trump ahead of November's congressional elections.
Demand outlook and Morgan Stanley forecast
On the demand side, investment bank Morgan Stanley lowered its forecast for Dated Brent crude prices in 2027 by $5 per barrel, projecting prices at $75 per barrel in the first half of the year and $70 per barrel in the second half, the report said. The bank cited expectations of rising commercial oil inventories among OECD countries and forecast an implied global oil market surplus of 4.8 million barrels per day in 2027.
For traders and analysts, the combination of geopolitical uncertainty and a bearish fundamental outlook keeps the market on edge. With the June 17 agreement fragile and OECD inventories expected to build, the direction of oil prices will likely hinge on whether US-Iran talks materialize and how effectively the Strait of Hormuz shipping lanes can be secured.
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