WTI Slides to $75 as Iran-Oman Talks Raise Prospect of Hormuz Reopening

Oil prices fell sharply this week as diplomatic talks between Iran and Oman revived the possibility of a reopening of the Strait of Hormuz, the chokepoint through which roughly a fifth of the world's seaborne crude passes. WTI crude dropped to $75 a barrel while Brent crude slipped to $83, erasing a chunk of the risk premium that had built since the U.S.-Iran confrontation escalated earlier this year.

The talks, confirmed by officials from both countries, raised expectations that Washington and Tehran could reach some form of understanding that would allow oil tankers to transit the strait without interference. Traders said the very prospect of normalised flows was enough to unwind speculative long positions that had been betting on sustained disruption.

Yet the market is far from pricing in a clean resolution. The United States has not formally adopted the proposed framework for handing over control of Iranian shipping in the Gulf, and Iran has threatened retaliation against what it described as renewed American attacks. The Houthi movement in Yemen separately claimed responsibility for attacks on Saudi oil tankers near Yanbu and off the coast of the Gulf of Aden, a reminder that the security situation across the region remains fragile.

US crude inventories add to the pressure

The diplomatic catalyst was compounded by bearish inventory data. U.S. crude stocks rose by 2.5 million barrels last week to 407 million barrels, the Energy Information Administration reported. Refinery runs slipped slightly while imports ticked higher, leaving the market with more supply than the refining system could absorb at current rates. The combination of a potential supply-side reopening and a domestic demand-side soft patch pushed prices through technical support levels that had held for weeks.

WTI tests the $74-$75 zone

On the 4-hour chart, WTI failed to sustain a rally above $90 and reversed sharply toward the $75 area, where prices are now consolidating. The $74-$75 band has acted as both support and resistance in recent months. A break below that zone would open the path toward $66, the level that marked the rebound low earlier this year. The relative strength index has slipped below the midpoint, suggesting momentum is tilted to the downside in the near term.