Oil prices fall to one-week low as hopes of US-Iran breakthrough ease supply concerns

Oil prices extended losses on Tuesday, dropping more than $1 per barrel as hopes of a diplomatic breakthrough between the United States and Iran eased concerns over disruptions to global energy supplies.Brent crude futures fell $1.47, or 1.66%, to $86.89 a barrel by 0326 GMT, while US West Texas Intermediate (WTI) crude declined $1.45, or 1.76%, to $81.16. Both benchmarks touched their lowest levels since July 20, after tumbling about 8% in the previous session.The decline came after US President Donald Trump said Washington was holding "good talks" with Iran and that there was a chance of resolving the conflict. However, he warned that US military strikes would resume if negotiations failed, while Iran also cautioned that it would retaliate if hostilities resumed.Analysts said the prospect of de-escalation had eased fears over attacks on critical energy infrastructure and shipping routes, though risks remain elevated.Adding to the downward pressure, the Caspian Pipeline Consortium's Black Sea terminal on Russia's coast resumed oil loadings after a week-long suspension caused by Ukrainian drone attacks.Despite the pullback in prices, concerns over Middle East supply disruptions persist. Saudi Arabia said it intercepted drones targeting petroleum facilities, while Yemen's Iran-aligned Houthi rebels claimed they had targeted Saudi Arabia's East-West Pipeline in response to Saudi drone strikes.Barclays said crude and refined product exports through the Strait of Hormuz remained well below normal levels, averaging 2.9 million barrels per day in the week ended July 24, compared with 5.9 million barrels per day the previous week. Meanwhile, a Reuters poll indicated that US crude oil inventories likely declined last week, while distillate fuel stockpiles are expected to have increased.Get the latest Business News and Live updates. Download the TOI app.