Oil prices continued to fall on Wednesday, extending heavy losses from the previous two trading sessions as investors closely watched developments in efforts to end the Iran conflict and reopen shipping through the Strait of Hormuz.
Brent crude futures fell 92 cents, or about 1.2%, to $78.44 per barrel. The global benchmark has now dropped more than 12% this week.
U.S. West Texas Intermediate (WTI) crude declined $1.07, or 1.4%, to $74.70 per barrel, bringing its weekly loss to more than 11%.
The latest decline came after Qatar said mediators were making progress toward ending the conflict. The comments raised hopes that tensions could ease and that energy shipments through the region may return to normal. However, Iran denied U.S. President Donald Trump’s claim that negotiations are currently underway.
On Tuesday, Brent crude closed more than 5% lower and fell below $80 per barrel for the first time since July 13.
Market analysts said the recent drop reflects fading concerns about immediate supply disruptions, but risks remain.
Priyanka Sachdeva, Head of Market Insights at Phillip Nova, said the geopolitical risk premium has largely disappeared for now, but the overall supply outlook still requires caution.
She noted that if diplomatic efforts fail and oil supplies are eventually affected, prices could rebound quickly, especially if inventories tighten and supply disruptions emerge.
Before the conflict began, around 20% of the world’s oil and liquefied natural gas shipments passed through the Strait of Hormuz, making the waterway one of the most important energy routes globally.
Analysts at IG said one of the key issues remains whether Iran will continue seeking influence over the waterway and whether the United States will oppose such demands.
Meanwhile, diplomatic discussions continued. U.S. President Donald Trump and Qatar’s Emir Sheikh Tamim bin Hamad Al Thani held a phone call on Tuesday to discuss ways to reduce tensions between Washington and Tehran and improve the chances of reaching a lasting agreement.
In the United States, oil market data also added pressure to prices. According to figures from the American Petroleum Institute, U.S. crude oil inventories increased by about 2.7 million barrels during the week ending July 31. Gasoline stocks also rose, while distillate inventories declined.
Investors are now awaiting official inventory data from the U.S. Energy Information Administration, which is expected later on Wednesday and could provide further direction for oil markets.
