Oil prices traded around the flatline on Wednesday as investors monitored continuing tensions between the United States and Iran over efforts to reopen the Strait of Hormuz.
Brent crude futures slipped about 0.5% to $88.50 per barrel by 09:50 ET, while U.S. West Texas Intermediate crude futures fell roughly 0.6% to $82.72 per barrel.
U.S.-Iran Talks Remain Stalled
Uncertainty increased after Reuters reported that Iran and the United States had not held talks to extend a previous ceasefire arrangement.
A senior Iranian source said Tehran did not consider the agreement to have had a formal start date, meaning there was nothing to extend.
The comments added to doubts over whether a diplomatic breakthrough is close.
Shipping Risks Keep Oil Markets on Edge
Tensions also remained elevated after Washington said it had attacked a vessel in the Gulf of Oman that it claimed was heading toward Iran.
At the same time, fresh strikes by Yemen’s Iran-backed Houthis on shipping in the Red Sea increased concerns about longer-lasting disruptions to Middle East energy flows.
These developments have kept oil traders focused on the possibility of continued supply pressure.
Strait of Hormuz Traffic Remains Limited
Shipping activity through the Strait of Hormuz remains subdued.
According to Kpler shipping data cited by Reuters, only eight vessels were tracked through the channel on Tuesday, marking a one-week low.
The strait remains crucial to global energy markets because it handled about 20% of global oil supplies before the conflict began.
Iran Keeps Hormuz Demands in Place
Iran indicated earlier this week that the Strait of Hormuz would remain closed unless Washington agreed to provide war reparations.
U.S. President Donald Trump later rejected those demands.
The dispute has reduced hopes for a quick reopening of the waterway and has kept a geopolitical risk premium embedded in oil prices.
Diplomatic Optimism Fades
Comments from Qatari and Pakistani officials on Tuesday had briefly increased optimism that the conflict could move toward a diplomatic resolution.
However, the latest developments suggest that major disagreements remain unresolved.
As a result, traders continue to balance weak progress in negotiations against the risk of further military escalation and supply disruption.
U.S. Strategic Petroleum Reserve Falls Sharply
Elsewhere, the U.S. Strategic Petroleum Reserve fell by 6.1 million barrels to 298.7 million barrels, according to Department of Energy data.
That marks the reserve’s lowest level in more than four decades.
The SPR was created to provide emergency oil supplies during major disruptions. It has been drawn down steadily this year as the Iran conflict has affected global energy markets.
For now, oil prices remain highly sensitive to developments around the Strait of Hormuz, Middle East shipping routes and negotiations between Washington and Tehran.
