Oil ticks higher as Iran's refusal to meet US envoys dims ceasefire hopes

Oil prices saw a modest increase in early trading Wednesday, driven by Iran's decision not to meet with U.S. envoys. This development further strains the interim ceasefire in the four-month conflict.

Brent crude futures gained 50 cents, or 0.69%, to reach $73.45 a barrel. U.S. West Texas Intermediate (WTI) crude also climbed, adding 63 cents, or 0.91%, to settle at $70.13 a barrel. These gains come after substantial quarterly losses, with Brent falling around $45 and U.S. crude futures dropping about $31, their largest quarterly declines since 2008 and 2020, respectively.

The recent easing of hostilities had previously pulled oil prices back from sharp gains. Analysts have consequently revised their 2026 oil price forecasts downward for the first time since the war began. This adjustment follows five consecutive monthly increases, as the reopening of the Strait of Hormuz has alleviated concerns about prolonged supply disruptions.

U.S. Vice President JD Vance asserted that Iran would be prevented from imposing tolls on ships transiting the Strait of Hormuz, stating, "This is not going to end in a place where the Iranians are collecting tolls on ships going through the Strait of Hormuz." He claimed that tanker traffic through the vital waterway has recovered to pre-war levels.

In related news, U.S. crude oil inventories and gasoline stocks reportedly fell last week, according to market sources citing data from the American Petroleum Institute. Crude stocks decreased by 6.1 million barrels in the week ending June 26. Official U.S. oil stock data from the Energy Information Administration is expected later on Wednesday.

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This is not going to end in a place where the Iranians are collecting tolls on ships going through the Strait of Hormuz.