Global oil prices retreated below the $68 per barrel mark as easing geopolitical tensions between the United States and Iran reduced concerns over potential supply disruptions in the Middle East.
Brent crude, the international benchmark, traded at $67.64 per barrel, reflecting a 0.5 per cent decline from the previous session’s close of $68. US benchmark West Texas Intermediate (WTI) also slipped by 0.5 per cent to $63.51 per barrel, down from $63.82.
The decline followed renewed diplomatic engagement between Washington and Tehran, which raised expectations of de-escalation after weeks of heightened tensions in the region.
US President Donald Trump said on Tuesday that negotiations with Iran are currently underway, although he did not provide specific details. His comments came shortly after a US fighter jet shot down an Iranian drone in the Arabian Sea after it approached the USS Abraham Lincoln aircraft carrier.
Trump said Iran had an opportunity to reach an agreement earlier but failed to do so, adding that Washington’s previous military response served as a deterrent. According to him, Tehran is now seeking dialogue to avoid further escalation.
Iran’s Foreign Ministry confirmed that preparations are ongoing for talks with the United States in the coming days. Spokesperson Esmail Baghaei said consultations are underway to finalise the venue, with an announcement expected once arrangements are completed.
Earlier, White House spokesperson Karoline Leavitt disclosed that US special envoy Steve Witkoff is scheduled to engage in discussions with Iranian officials later in the week.
Witkoff had been expected to meet Iranian Foreign Minister Abbas Araghchi in Istanbul on Friday to discuss Iran’s nuclear programme. However, reports indicate that Iran requested changes to both the venue and format of the talks.
According to Axios, Tehran is now pushing for direct talks rather than a multilateral format and has proposed relocating the meeting from Istanbul to Oman. The report, citing two anonymous officials, said negotiations are now expected to take place in Oman on Friday.
Despite the renewed diplomatic momentum, analysts caution that risks remain elevated. Any escalation in military activity across the Middle East could quickly reignite supply concerns and limit further downside in oil prices.
On the supply side, US crude inventory data also influenced market sentiment. The American Petroleum Institute reported a sharp drawdown of 11.1 million barrels in commercial crude stocks last week, far exceeding market expectations for a 700,000-barrel build.
Analysts attributed the decline to cold weather disruptions affecting production in parts of the US, as well as temporary interruptions to crude exports along the Gulf of Mexico coast.
The US Energy Information Administration is expected to release its official inventory figures later on Wednesday, which could further influence near-term price movements.
