Oil falls as easing Middle East tensions send Brent to its worst quarter

Oil prices fell on Wednesday as investors weighed signs of progress in indirect negotiations between Washington and Tehran, easing concerns about potential disruptions to crude supplies in the Middle East.

U.S. West Texas Intermediate crude futures fell 1.33% to $67.67 a barrel, while global benchmark Brent crude declined 1.12% to $70.77.

Brent has fallen nearly 40% this quarter, marking its worst quarterly performance since 2020, according to LSEG data.

The decline also came after U.S. President Donald Trump told reporters that negotiations with Iran in Qatar were “going well.”

“The denuclearization of Iran is moving along well,” Trump said. “They’ve had very good meetings and we’ll see.”

Indirect negotiations between the U.S. and Iran began in Doha on Tuesday, with U.S. special envoy Steve Witkoff and Jared Kushner holding talks through Qatari mediators rather than meeting Iranian officials face-to-face.

The renewed diplomatic push follows a flare-up in hostilities over the weekend that threatened a 60-day ceasefire between the two countries. Iran attacked two commercial vessels, prompting retaliatory U.S. strikes on targets inside Iran.

Investors are increasingly pricing in the possibility that tensions could ease if negotiations continue to make progress, reducing concerns over potential disruptions to Middle Eastern oil supplies.

ING said the market remains optimistic that oil supplies from the Persian Gulf will normalize despite recent military flare-ups, helping explain why Brent has suffered its worst quarter since early 2020.

Shipping activity through the Strait of Hormuz also appears to be gradually recovering. ING estimates total tanker crossings at around 11 on Tuesday, below last week’s peak of 24, but noted inbound traffic has started to pick up, suggesting shipowners are becoming more confident about returning vessels to the Persian Gulf.