Oil prices fluctuated between slight gains and losses, as traders awaited news of an agreement between Iran and Oman to partially reopen the Strait of Hormuz.
Brent crude rose slightly to around $80 a barrel, while West Texas Intermediate crude traded near $76.
A joint statement from the two countries is currently being reviewed, and the route will remain open for a period of two to four months, although the agreement does not mean the complete reopening of the strait, according to Iranian officials.
It is not yet clear whether the United States will support the agreement or not.
President Donald Trump said during a rally in Las Vegas on Wednesday that the United States is talking to Tehran, and that he will see what happens in the ongoing negotiations.
Crude oil prices fell amid optimism that some form of agreement was close to being reached to restore traffic through the vital waterway, after Trump earlier reiterated that a deal was imminent.
Arne Lohmann Rasmussen, senior analyst at Global Risk Management, told Bloomberg: “The market looks ready for a deal. Brent crude has fallen by about $20 from its recent peak, and speculative investors aren’t taking aggressive positions that bet heavily on higher prices, but there’s still room for some further declines in the short term if a deal is confirmed.”
However, uncertainty persists, and traders have refrained from fully liquidating their long positions, fearing a sudden escalation. In a sign of the continued risks to shipping in the Middle East, the British Royal Navy reported that a tanker heard two explosions while transiting the Strait of Hormuz near Khasab in Oman.
US inventories rebound
Meanwhile, U.S. crude inventories rebounded from their lowest levels since 2018, with stockpiles at Cushing, Oklahoma, rising again above 20 million barrels, a level widely considered the operational minimum, according to government data released Wednesday. Exports of distillates, a category that includes mostly diesel, also climbed to a new record high, according to Bloomberg.
Elsewhere, oil loading operations resumed at the main terminal of the Caspian Pipeline Union on the Black Sea, after being halted following warnings of drone attacks in a nearby area. The terminal handles most of Kazakhstan's crude oil exports.
Price movements:
Brent crude futures for October settlement rose 0.9% to $80.19 a barrel at 11:24 a.m. in London.
West Texas Intermediate crude futures for September delivery settled at $75.83 a barrel.
