Oil prices fall as Iran and Oman move closer to Strait of Hormuz deal

Oil prices declined on August 6 following reports of progress in negotiations between Iran and Oman.

Negotiators from the two countries were at the final stage of reaching an agreement on a route for vessel movement through the Strait of Hormuz, Al Jazeera reported on August 5, citing Iranian Foreign Ministry spokesman Esmail Baghaei.

“The geographical coordinates of the route proposed by the two sides have been agreed upon, and provided that certain third parties do not obstruct the process, the joint statement by the two countries, incorporating the main considerations and points of agreement, is also in the final stage of review and drafting,” he said.

However, he noted that a potential agreement would not be able to guarantee security in the Strait of Hormuz due to the risk of destabilising actions by the United States.

The developments in the talks were reflected in oil prices. October Brent crude futures on London's ICE Futures exchange were down $0.35, or 0.44%, at $79.10 per barrel. On August 5, Brent gained $0.09, or 0.1%, to close at $79.45 per barrel.

September WTI futures were down $0.48, or 0.64%, at $74.74 per barrel in electronic trading on the New York Mercantile Exchange (NYMEX). In the previous session, the contract fell by $0.55, or 0.73%, to $75.22 per barrel.

By Jeyhun Aghazada