Iran and Oman have moved closer to an agreement on reopening the Strait of Hormuz to commercial shipping, with both sides agreeing on the geographical coordinates of a proposed safe navigation corridor, even as conflicting messages over possible US-Iran negotiations continue to cloud prospects for a broader diplomatic breakthrough.
Oil prices remained under pressure on Tuesday after suffering steep losses over the previous two sessions, as growing optimism over a potential breakthrough in US-Iran diplomacy raised hopes that the Strait of Hormuz could soon be reopened to normal shipping, easing fears of disruptions to global crude supplies.
Oil prices recovered on Tuesday after suffering their steepest one-day decline in weeks, as persistent concerns over potential supply disruptions in the Middle East outweighed optimism that diplomatic efforts could quickly end the five-month-old conflict between the United States and Iran.
A fresh attack on a commercial vessel near the Strait of Hormuz and the diversion of Saudi-operated tankers away from the Red Sea underscored mounting risks to global energy supplies on Tuesday, even as the US and Iran issued conflicting statements over the status of negotiations.
Oil prices fell sharply on Monday after US President Donald Trump suspended plans for military strikes against Iran and announced that negotiations with Tehran would resume, raising hopes of reducing the risk of disruptions to global crude supplies.
Diplomatic efforts to defuse the Gulf crisis are expected to gain fresh momentum on Monday as the United States and Iran prepare to resume negotiations, following US President Donald Trump's decision to suspend a planned military strike against Iran.
The United States launched a second consecutive day of major military strikes against Iran on Tuesday, targeting about 90 military sites along its coastline, as Tehran retaliated by firing missiles and drones at US military facilities in Bahrain and Kuwait, sharply escalating tensions across the Gulf.
The world's leading economic and energy institutions have called for renewed efforts to resolve the conflict in the Middle East and reopen the Strait of Hormuz, warning that although the global economy has remained resilient, the war continues to pose risks to growth, inflation and global trade.
The International Energy Agency (IEA) forecasts global natural gas demand will fall 0.5 per cent in 2026 as Middle East conflict-driven supply disruptions, higher prices and reduced LNG flows through the Strait of Hormuz weigh on consumption.
Oil prices climbed nearly 2% on Wednesday as renewed US airstrikes on Iran and fresh sanctions on Tehran's oil exports reignited concerns over supplies from the Middle East after attacks on commercial vessels in the Strait of Hormuz.
