Oil holds firm amid hopes for U.S.-Iran diplomatic breakthrough

August 05, 2026 (MLN): Oil prices were little changed on Wednesday after tumbling over the previous two sessions, as markets assessed diplomatic efforts to end the conflict between the United States and Iran and reopen the strategically important Strait of Hormuz.

Currently, Brent crude futures is up, 1.92%, at $80.88 per barrel, according to data by Mettis Global.

West Texas Intermediate (WTI) crude futures is down by $0.90, or 1.19%, to $76.67 per barrel by [03:35 am] PST.

Investor sentiment improved after Qatar said mediators were making headway in attempts to secure a ceasefire, raising expectations that shipping through the vital waterway could resume.

However, Iran rejected U.S. President Donald Trump's claim that negotiations with Washington were already underway.

Uncertainty remains over whether Iran will seek to retain influence over the Strait of Hormuz and whether the United States will oppose such a move, leaving the outcome of the talks unclear.

Oil prices had fallen sharply after Qatar's remarks, with Brent settling below $80 a barrel on Tuesday for the first time since July 13.

The decline extended Monday's losses as traders bet that a diplomatic resolution could ease concerns over supply disruptions. Before the conflict began, around one-fifth of global oil and liquefied natural gas shipments passed through the Strait of Hormuz.

According to Qatar's Emiri office, President Trump and Qatar's Emir Sheikh Tamim bin Hamad Al Thani discussed efforts to bridge differences between Washington and Tehran during a phone call on Tuesday and explored prospects for a lasting settlement.

Trump said on Monday that talks with Iran had begun and described the situation as Tehran's "last chance" to reach an agreement. Iranian authorities, however, maintained that no negotiations with the United States were taking place.

Meanwhile, market participants also awaited fresh U.S. inventory data. Industry figures released by the American Petroleum Institute showed U.S. crude oil inventories increased by about 2.7 million barrels in the week ended July 31, while gasoline stocks also rose and distillate inventories declined.

The U.S. Energy Information Administration is scheduled to release its official weekly petroleum inventory report later on Wednesday, which could provide further direction to oil prices.

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