Oil pares gains after Qatar says US-Iran diplomatic efforts continue
A view shows oil pump jacks outside Almetyevsk, in the Republic of Tatarstan, Russia, on Jul 14, 2025. (File photo: Reuters/Stringer)
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Oil prices pared gains on Tuesday (Aug 4) after Qatar said efforts to secure a diplomatic resolution to the United States-Iran conflict were continuing, while disruptions to oil flows through key shipping routes persisted.
Front-month Brent futures rose 17 cents, or 0.2 per cent, to US$83.94 a barrel by 11.24am GMT (7.24pm, Singapore time) after hitting a session high of US$86.33.
US West Texas Intermediate (WTI) crude was down 30 cents, or 0.37 per cent, at US$80.04 a barrel after touching a session high of US$82.33.
Both contracts were up more than 2 per cent earlier in the session, supported by uncertainty over prospects for a US-Iran agreement.
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“Oil prices are pairing earlier gains on comments from Qatari officials saying a potential US-Iran resolution has been drafted,” said Giovanni Staunovo, a UBS analyst.
Qatar Foreign Ministry spokesperson Majed Al Ansari said efforts to secure a diplomatic resolution to the conflict were continuing, with mediators including Qatar, Pakistan and Oman coordinating closely to facilitate negotiations and exchange draft proposals between the two sides.
“While production in the Middle East has recovered from the lows, it remains below pre-conflict levels, keeping the oil market undersupplied,” Staunovo added.
GULF SHIPPING TRAFFIC LITTLE CHANGED
The Hormuz dispute is a central sticking point in talks. Before the conflict began in late February, the Strait of Hormuz handled about one-fifth of global daily oil and liquefied natural gas supplies.
Iran wants control over inbound shipping through the Strait of Hormuz and visibility over outbound traffic, with the ability to intervene if necessary, under a plan being discussed with Oman to reopen the strategic waterway, a senior Iranian source told Reuters on Tuesday.
“Gulf exports remained under pressure, with Strait of Hormuz transits only marginally improving from extremely depressed levels. The export disruption story is intact, with Iranian attacks on vessels constraining flows,” ANZ analysts said.
Shipping traffic at the key Gulf waterways of Bab el-Mandeb and the Strait of Hormuz held largely unchanged at the start of the week.
Hormuz remains dangerous for vessels. On Tuesday, the UK Maritime Trade Operations agency flagged an incident 37km northeast of Oman’s Al Khasab, after a cargo vessel broadcast that it had been hit by an unknown projectile.
In the Red Sea, six Saudi-flagged supertankers changed course in the Gulf of Aden recently for southern Africa, while two tankers laden with Saudi oil crossed the Bab el-Mandeb Strait, shipping data showed on Monday.
Goldman Sachs expects Brent to remain in a US$80 to US$90 a barrel range until there is either confirmation of a new US-Iran agreement or a significant escalation in attacks and targets.
Source: Reuters/co
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