Oil falls as progress in US-Iran talks cools supply concerns

By Seher Dareen and Anushree Mukherjee

LONDON, ‌July 1 (Reuters) - Oil prices ​fell on ​Wednesday as optimism over U.S.-Iran talks eased supply concerns after U.S. President Donald Trump said meetings in Qatar had gone well.

Brent futures were down 95 cents, or 1.30%, to $72.00 a barrel ‌at 0119 GMT. U.S. West Texas Intermediate crude was down 54 cents, or 0.78%, at $68.96 ⁠a barrel — its lowest since February 27.

"The negotiations that are currently taking place in Qatar are perceived as being positive (and) that has ‌allowed prices to drift further," Saxo ‌Bank analyst Ole Hansen said.

"There is a chance that we could see even lower prices."

Trump said on Wednesday the U.S. was getting along very well with Iran and that recent meetings in Qatar went well.

The ​U.S. and Iran held technical talks in Doha as they seek to agree on the flow of shipping through the Strait of Hormuz and secure a lasting ceasefire, a source with direct knowledge of the talks ⁠and an Iranian official said.

Brent fell by around $45 a barrel in the second quarter of this year, its largest quarterly drop since the global ​financial crisis in 2008. U.S. crude futures, meanwhile, fell by around $31, their largest quarterly decline since 2020, when the COVID-19 pandemic crushed global oil demand.

The falls followed progress towards ​ending the Middle East conflict, after sharp gains in March ‌triggered by the outbreak in hostilities.

Following five straight monthly increases, analysts have cut their 2026 oil price forecasts for the first time since the Iran war began, as the ⁠reopening of the Strait of Hormuz eased concerns over prolonged supply disruptions, a Reuters poll showed.

Tanker traffic through the critical waterway has started to recover, with U.S. Vice President JD Vance saying that oil flows through the strait had returned to ⁠pre-war levels.

Meanwhile, OPEC+ oil-producing countries will likely agree a further hike in their output targets from August when they meet on Sunday, ​three sources said on Wednesday, adding to supply at a time of falling prices amid the gradual reopening of the Strait of Hormuz.

Oil prices appear to have settled into a new range of $72 to $75 a barrel, although the market has yet to ‌fully normalise and the conflict in the Middle East continues to create uncertainty, Brazilian state-run oil firm Petrobras' CEO Magda Chambriard told Reuters.

Elsewhere, markets are awaiting official ‌U.S. oil stock data from the Energy Information Administration, which will be released at 10:30 a.m. EDT (1430 GMT). U.S. crude oil ⁠inventories fell again last week, market sources said, ‌citing data from the American ​Petroleum Institute released on Tuesday. [API/S]

(Reporting by Seher Dareen in London, Anushree Mukherjee in Bengaluru, Mohi Narayan in New Delhi and Georgina McCartney in Houston. Editing by Joe Bavier, Louise Heavens and ‌Mark Potter)

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