Oil prices moved higher during Tuesday's trading session, but the overall market picture remains mixed. Brent crude and US West Texas Intermediate (WTI) crude futures are still heading for their biggest quarterly losses since the COVID-19 pandemic despite the day's gains. Investors are watching several developments that could influence the market, including possible diplomatic discussions between the United States and Iran, shipping activity through the Strait of Hormuz, and changing global supply expectations. Analysts are also reviewing updated price forecasts after concerns about supply disruptions eased. These factors will play an important role in determining whether crude oil prices continue to recover or face renewed pressure.
Why are oil prices up today, and will Brent and US WTI crude futures continue to rise or fall again?
Oil prices traded higher on Tuesday as investors reacted to developments surrounding possible diplomatic discussions between the United States and Iran. The market also continued to monitor the situation in the Strait of Hormuz, one of the world's most important oil shipping routes. Brent crude futures for August delivery, which expire on Tuesday, rose by 16 cents or 0.22% to reach $73.31 per barrel during trading. The more actively traded September Brent contract gained 45 cents or 0.61% to trade at $74.36 per barrel.
US West Texas Intermediate (WTI) crude futures for August delivery increased by 37 cents or 0.52% to $71.12 per barrel. Although prices moved higher during the day, both benchmark contracts remained on track for major monthly and quarterly declines. Brent crude was set for its third straight monthly loss, falling about 20% during June. US WTI crude was heading for its second consecutive monthly decline, losing around 19% during the month.
Looking at the broader picture, Brent crude had declined around 38% during the second quarter, while WTI crude had fallen approximately 29%. Despite recent volatility, both benchmarks have returned close to levels seen before the recent conflict disrupted energy markets.
Oil market watches US-Iran talks and Strait of Hormuz developments
One of the biggest factors influencing oil prices is the possibility of future discussions between the United States and Iran. Earlier expectations suggested that senior officials from both countries could meet in Doha. However, Qatar later confirmed that no high-level meeting would take place during the current visit.
Instead, technical-level discussions are expected to cover regional security issues. If progress is made, those discussions could eventually move to meetings involving senior officials. The announcement reduced expectations for immediate diplomatic progress while keeping uncertainty in the market.
The situation also highlights the fragile ceasefire reached on June 17 after months of conflict. The fighting had disrupted oil transportation through the Strait of Hormuz, creating concerns about global energy supplies. Because around one-fifth of global oil shipments pass through the Strait of Hormuz, any disruption in the region can quickly affect international oil prices.
Shipping activity eases some supply concerns
Analysts believe recent shipping movements have helped reduce some of the pressure on global oil supplies. UBS analyst Giovanni Staunovo said he would not say that the market has completely removed the geopolitical risk premium from oil prices. However, he noted that ships previously unable to leave the Gulf have now become available as more vessels move through the region.
This increase in shipping activity has temporarily added more oil supply to the market. As more crude cargoes leave the Gulf without major disruptions, traders have become less concerned about immediate supply shortages. This has limited further gains in oil prices despite continuing geopolitical uncertainty.
Analysts insights and market outlook
Several analysts believe that future oil prices will depend not only on geopolitical developments but also on global supply balances. Morgan Stanley now expects the global oil market to record an implied surplus of about 4.8 million barrels per day by 2027. A larger supply surplus could place downward pressure on oil prices if demand does not increase at the same pace. A separate Reuters survey also showed that analysts have lowered their oil price forecasts for 2026 for the first time since the Iran conflict began.
The survey followed five consecutive months of increasing price expectations. Analysts believe that the reopening of the Strait of Hormuz has reduced fears of prolonged supply disruptions, making lower price forecasts more likely. The latest estimates suggest that traders now see fewer risks to global oil transportation than they did during the height of the conflict.
Iraq offers discounts to attract crude buyers
Another factor affecting the oil market comes from Iraq. According to trade sources and documents reviewed by Reuters, Iraq's State Organization for Marketing of Oil (SOMO) has offered larger discounts on its official selling prices for Basrah crude loading in July.
The discounts are intended to encourage long-term customers to continue purchasing Iraqi crude from terminals located in the Middle East Gulf. Lower official selling prices can increase competition in the global crude market by making Iraqi oil more attractive to buyers. If additional discounted supplies enter the market, they may contribute to higher overall availability of crude oil. That could also place pressure on oil prices in the coming months.
What should investors do now?
Investors are likely to remain focused on several key developments before making long-term decisions. The progress of technical discussions involving the United States and Iran will remain important because any diplomatic breakthrough could influence future sanctions and oil exports.
Market participants will also continue watching shipping activity through the Strait of Hormuz for signs of renewed disruption or smooth transportation. Global supply forecasts from investment banks, demand trends, production decisions by oil-producing countries and pricing strategies from exporters such as Iraq will also shape market expectations.
While oil prices posted gains during Tuesday's trading session, the broader trend still reflects significant quarterly losses. Future price direction will depend on whether geopolitical tensions increase again or whether improving supply conditions continue to outweigh risks.
FAQs
Q1. Why are oil prices up today despite falling this quarter?
Oil prices rose because traders reacted to US-Iran developments and shipping activity around the Strait of Hormuz. However, Brent and WTI remain lower for the quarter as supply concerns eased.
Q2. Will Brent and US WTI crude futures continue to rise or fall again?
Future price movements will depend on US-Iran negotiations, Strait of Hormuz shipping, global supply forecasts, demand trends, Iraq's crude exports and changing geopolitical risks affecting energy markets.
