Oil Prices Drop Below $68 as Supply Side Risks Ease

Oil Prices Drop Below $68 as Supply Side Risks Ease

Oil prices fell below $68 in the global commodity market as supply risks reduced following renewed diplomatic engagement between the US and Iran.

International benchmark Brent crude traded at $67.64 per barrel, down 0.5% from the previous close of $68. US benchmark West Texas Intermediate (WTI) declined 0.5% to $63.51 per barrel, compared with $63.82 in the prior session.

US President Donald Trump said Tuesday that Washington is negotiating with Iran “right now,” without offering details. His remarks came after a US fighter jet shot down an Iranian drone in the Arabian Sea on Tuesday after it approached the USS Abraham Lincoln aircraft carrier.

“They had a chance to do something a while ago, and it didn’t work out, and we did (Operation) Midnight Hammer. I don’t think they want that happening again, but they would like to negotiate. We are negotiating with them right now,” he said.

Iran’s Foreign Ministry said that preparations are underway to hold talks with the US in the coming days, with consultations ongoing to finalize the venue.

“Planning has been made to hold the talks in the next few days, and consultations are underway to determine the location of the talks, which will be announced as soon as they are finalized,” said spokesperson Esmail Baghaei.

Earlier, White House spokesperson Karoline Leavitt said US special envoy Steve Witkoff is set to have conversations with the Iranians later this week.

Witkoff had been scheduled to meet with Iranian Foreign Minister Abbas Araghchi in Istanbul on Friday for talks on Iran’s nuclear program, according to multiple reports.

Axios, however, reported Tuesday that Iran demanded changes to the location and stipulated that Tehran wants to change the format.

Reports suggested that representatives from Türkiye, Egypt and Qatar were expected to join the talks, but Axios said Iran is now pushing to hold the talks directly. It also said that Tehran wants to move the location from Istanbul to Oman.

Axios, citing two officials who spoke on condition of anonymity, reported that talks between the US and Iran are expected to be held in Oman on Friday.

Despite the diplomatic momentum, risks remain. Any escalation in military activity in the Middle East could disrupt oil supplies, helping keep prices from falling more sharply.

On the supply side, US crude inventories surprised markets with a steep decline. The American Petroleum Institute predicted that commercial crude stocks fell by 11.1 million barrels last week, far exceeding expectations for a 700,000-barrel build.

Analysts said the drop likely reflected the impact of cold weather that disrupted production in parts of the US, as well as temporary interruptions to crude exports along the Gulf of Mexico coast.

The US Energy Information Administration is due to release official inventory data later on Wednesday. # Oil Prices Below $68 as Supply Side Risks Ease Gaddafi’s Son Saif al-Islam Assassinated in Libya