Oil prices moved lower on Tuesday, reversing part of the previous session’s advance after fresh comments from US President Donald Trump suggested that communication channels with Iran remain open.
Efforts to reduce tensions in the region could also limit the upside risks for crude.
However, conflicting messages from Washington and Tehran continue to create uncertainty.
Traffic through the Strait of Hormuz continues to operate at a fraction of historical levels, providing a floor to crude prices. As a result, market participants could remain focused not only on diplomatic headlines but also on maritime activity levels. Until shipping volumes improve materially, concerns over supply availability are likely to persist.
Looking ahead, while credible progress toward an agreement could continue to pressure prices lower, restricted energy flows and tight physical balances may limit the extent of any sustained decline. At the same time, a gradual normalisation could limit the pace of price decreases.
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