Oil prices fall to levels not seen since the start of the US-Israel war in Iran | US-Israel War on Iran News

Oil prices have fallen to levels not seen since the start of the US-Israel conflict in Iran as hopes rise for a breakthrough in talks aimed at sealing a permanent peace deal.

Brent crude fell more than 1 percent on Thursday to below $71 a barrel, bringing the global benchmark back to pre-war prices.

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Brent futures for August delivery were at $70.82 a barrel as of 04:30 GMT, the lowest since February 27.

Following the latest decline, Brent prices have fallen more than 38 percent from their post-war peak of over $126 a barrel on April 30.

The demonstration came after Qatar, an important mediator between Washington and Tehran, said that US and Iranian officials have moved forward “in direct talks aimed at resolving issues related to their memorandum of understanding (MoU) on ending hostilities.”

The US President, Donald Trump, also expressed positive views on the talks on Wednesday, saying that “the denuclearization of Iran is going well”.

Vandana Hari, founder of Singapore-based oil analysis firm Vanda Insights, said an increase in oil output from the Gulf and “optimistic geopolitical sentiment” have kept prices down.

“A number of key issues in the MoU have not been resolved, but the two sides seem to have put an end to the conflict over the management of Hormuz, for now,” Hari told Al Jazeera.

“I expect crude to continue to decline until the excess barrels are finished, and prices may fall into the oversold zone,” he said.

“The real test of the sustainability of the presence of the Persian Gulf will come later, it will require a proper renovation.”

Shipping in the Strait of Hormuz, which accounts for a fifth of the world’s oil and natural gas trade in peacetime, has shown visible signs of recovery in recent days after a sharp decline following the attack on two commercial vessels in the waterway on Thursday and Saturday.

At least 40 ships passed through the channel on Tuesday, according to data from MarineTraffic, up from 27 on Monday and 22 on Sunday.

Maritime traffic is still at a pre-war low of about 130 crossings each day amid security concerns in the waterway.

While Iran agreed to make “efforts” to improve safe shipping lanes in the MoU it signed with the US on June 17, Tehran has repeatedly asserted that it has the right to control traffic through the channel.

At least 49 attacks on commercial ships have been recorded in the strait since the beginning of the war, according to MarineTraffic, most of which were attributed to Tehran or its power.

Neil Crosby, an oil market analyst at Sparta Commodities in Singapore, said that while the fall in Brent reflects the market’s “low confidence” that supplies have run out and the recent rise in output, it is too early to say that prices will remain in the pre-war war.

“This is not a fixed or fixed thing. It’s not about politics as we all see it. And it’s not just about the oil market in terms of supply, demand, and sales,” Crosby told Al Jazeera.

“Many of the major moving parts are being played out; lower prices could see global retailers return to the market and clear the guts over time,” he said.

So when it comes to value, I seriously doubt we’re ‘out of the woods yet.’