By: Economy Middle East

Oil prices edged higher after a sharp selloff as investors looked for clearer signs that crude shipments through the Strait of Hormuz were steadily recovering following recent U.S.-Iran peace talks. While optimism over improving shipping conditions has eased supply concerns, markets remain cautious about how quickly normal trade flows can fully resume. 

Brent crude ‌futures fell 28 cents, or 0.36 percent, to $77.24 a barrel and U.S. West Texas Intermediate declined to $73.72 a barrel, down 13 cents, or 0.18 percent, as of 03:51 GMT time.

Shipping recovery

Recent ship tracking data shows tanker traffic gradually increasing through the Strait of Hormuz after earlier disruptions caused by regional tensions. Two crude tankers carrying nearly 2 million barrels of oil transited the waterway, while additional supertankers entered the Gulf, suggesting commercial shipping activity is slowly recovering. However, vessel movements remain well below pre-conflict levels, indicating that exporters and shipping companies are still proceeding cautiously. 

The gradual return of shipping has become a key factor influencing oil prices. Traders view improving tanker movements as an indication that global crude supplies could continue stabilizing if diplomatic progress holds.

Investors have largely shifted their focus from immediate geopolitical headlines toward the pace at which oil exports can normalize through Hormuz.

Even with improving sentiment, analysts caution that confidence remains fragile. Any disruption to shipping or setbacks in diplomatic negotiations could quickly reintroduce a geopolitical risk premium into crude prices.

Supply outlook

The Strait of Hormuz remains one of the world’s most strategically important energy chokepoints, handling roughly one-fifth of global oil trade. As a result, relatively small changes in tanker traffic can influence market expectations for global supply, shipping costs, and refinery operations.

Government data released on Monday showed that U.S. crude oil inventories in the Strategic Petroleum Reserve fell to 331.2 million barrels last week, their lowest level since June 1983, as supplies tightened following the U.S.-Iran conflict.