Crude oil prices fell for a third consecutive session on Thursday, driven by emerging signs of diplomatic progress regarding the Strait of Hormuz.
Qatar announced on Wednesday that an interim proposal has been drafted, signaling a potential de-escalation in the long-standing dispute between the United States and Iran.
The development has helped ease fears of a renewed supply disruption in one of the world’s most critical energy chokepoints.
Brent crude and WTI benchmarks dropped approximately 1% on Wednesday, extending a three-day losing streak as markets digested reports of progress in indirect talks between the United States and Iran regarding the Strait of Hormuz.
The sell-off reflects a sustained reduction in geopolitical risk premiums that had been propping up energy prices since tensions flared earlier in the year.
Investors are increasingly pricing in a scenario where shipping routes remain open, reducing the immediate threat to global oil flows.