Oil prices slipped on Thursday as investors assessed whether progress in Iran-Oman talks could pave the way for a US-Iran peace deal to end the five-month war and reopen the Strait of Hormuz. Brent crude futures fell 37 cents, or 0.5%, to $79.08 a barrel by 0024 GMT, while US West Texas Intermediate futures declined 53 cents, or 0.7%, to $74.69 a barrel.
"Some selling pressure emerged following reports that talks between Iran and Oman are making progress," said Yuki Takashima, an economist at Nomura Securities. Prices have returned to levels seen when the US and Iran signed an interim peace agreement on June 17, with investors watching for a final deal.
A proposed deal would give Tehran control over ships entering the Gulf through the Strait of Hormuz, a senior Iranian source and two regional officials said. There was no immediate US comment on the proposal, though President Donald Trump said a deal reopening the strait is imminent while US officials insisted they would never agree to Iran controlling access to the energy trade route.
Iran has warned Gulf states that any new US attack on its territory would trigger retaliation against critical energy infrastructure across the region, according to five sources. Meanwhile, Yemen's Iran-aligned Houthis said on Wednesday they launched missile attacks on a Saudi oil tanker off Yanbu and another in the Gulf of Aden, with no confirmation from Saudi Arabia.
Takashima said concerns that Houthi attacks could hit Red Sea shipping were limiting optimism about ending disruptions. Separately, the Energy Information Administration reported that US crude inventories rose by 2.5 million barrels to 407 million barrels in the week ended July 31, compared with analysts' expectations for a 5 million-barrel draw.