Oil prices moved slightly lower on Thursday as markets continued to monitor developments surrounding the negotiations between the United States and Iran.
While hopes of a resolution could push prices down, the physical market remains tight.
Although isolated tanker movements have taken place through the Strait of Hormuz, shipping activity remains severely restricted, leaving one of the world’s most important energy corridors operating far below normal levels.
As a result, supply conditions remain difficult and continue to support prices despite improving sentiment around the diplomatic process. Recent declines in US inventories also reinforce the perception that underlying balances remain constrained.
Looking ahead, any clear diplomatic progress could continue to weigh on oil prices in the near term. However, persistent logistical disruptions and fragile supply conditions suggest that downside risks for prices may remain limited as normalisation could take time, while renewed tensions could quickly restore upward momentum.
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