LONDON: Oil prices rose in early trading on Wednesday after Iran ruled out direct talks with senior US officials, raising fresh concerns over the durability of the interim ceasefire between Washington and Tehran.
Brent crude futures gained 50 cents, or 0.69%, to $73.45 a barrel by 1208 GMT, while US West Texas Intermediate (WTI) crude rose 63 cents, or 0.91%, to $70.13 a barrel.
Why are oil prices rising?
Investor sentiment was affected after Iran announced it would not hold direct talks with US envoys who travelled to Doha as part of diplomatic efforts to advance the ceasefire agreed after months of conflict.
The White House had described the visit by US envoy Steve Witkoff and President Donald Trump’s son-in-law Jared Kushner as “high-level” talks. However, Iran and host Qatar said discussions would take place through mediators rather than direct negotiations.
Qatar confirmed that Prime Minister Sheikh Mohammed bin Abdulrahman al-Thani met the US delegation.
How have oil markets performed?
Despite Wednesday’s gains, oil prices remain well below the highs recorded during the conflict.
Brent crude fell by about $45 per barrel during the first half of the year, marking its steepest quarterly decline since the 2008 global financial crisis. US crude futures dropped around $31 per barrel, their largest quarterly fall since 2020, when the Covid-19 pandemic sharply reduced global fuel demand.
The declines reflected easing concerns over supply disruptions as diplomatic efforts reduced tensions in the Middle East.
What are analysts expecting?
A Reuters poll published on Tuesday showed analysts lowered their 2026 oil price forecasts for the first time since the Iran conflict began, citing the reopening of the Strait of Hormuz and reduced fears of prolonged supply disruptions.
US Vice President JD Vance said the United States would not allow Iran to impose tolls on commercial vessels using the strategic waterway.
Speaking on The Michael Knowles Show, Vance also said oil shipments through the Strait of Hormuz had returned to pre-conflict levels.
What are markets watching next?
Market participants are also monitoring US crude inventory data for further direction.
According to market sources citing figures from the American Petroleum Institute, US crude oil inventories fell by 6.1 million barrels in the week ending June 26, while gasoline stocks also declined.
Investors are now awaiting official inventory data from the US Energy Information Administration, scheduled for release later on Wednesday, for further indications of demand and supply trends.