Oil prices ease on Hormuz reopening hopes
XLE•Talks, inventories and shipping risks
U.S. President Donald Trump said there was an "all-day negotiation" on Tuesday with Iran, characterizing the talks positively while also threatening to hit Iran "really hard" if a deal with Tehran was not reached.
Tehran denied that peace talks were under way. Its foreign ministry said on Wednesday that Iran and Oman have reached an understanding on how to manage the Strait of Hormuz, and a joint announcement is being finalised.
Before the war started at the end of February, about 20% of the world's oil and liquefied natural gas passed through the Strait of Hormuz.
"There still is some scepticism in the market about who is negotiating with whom and what the agreement may ultimately mean for shipping," said Andrew Lipow, president of Lipow Oil Associates.
Reports of progress in efforts to end the war drove prices down 5% on Tuesday, with Brent closing below $80 a barrel for the first time since July 13.
