Oil Price Today (July 1): Crude oil above $73 as Iran rejects direct peace talks with US. Where are prices headed?

Crude oil price on July 1

Brent crude futures were up 50 cents, or 0.69%, at $73.45 a barrel at 1208 GMT. U.S. West Texas Intermediate (WTI) crude rose 63 cents, or 0.91%, to $70.13 a barrel.

U.S. President Donald Trump’s son-in-law Jared Kushner and special envoy Steve Witkoff arrived in Doha on Tuesday for what the White House described as “high level” talks. However, Iran and host nation Qatar said the U.S. delegation would meet mediators instead of holding direct discussions with Iranian representatives.

Oil prices had declined sharply over the previous quarter as tensions in the Middle East showed signs of easing. Brent crude dropped by around $45 a barrel between the first and second quarters of this year, marking its steepest quarterly fall since the 2008 global financial crisis.

U.S. crude futures fell by around $31 during the same period, the biggest quarterly decline since 2020, when the Covid-19 pandemic hit global oil demand. The losses came after progress towards ending the Middle East conflict reversed the sharp gains triggered earlier by the hostilities.

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Analysts have lowered their 2026 oil price forecasts for the first time since the Iran war began, following five consecutive monthly increases, after the reopening of the Strait of Hormuz reduced concerns over prolonged supply disruptions, a Reuters poll showed on Tuesday.
Tanker traffic through the strategically important waterway has started recovering, with US Vice President JD Vance saying oil flows have returned to pre-war levels.

What are experts saying?

Even so, a full reopening of the Strait of Hormuz is expected to take time. It will require coordination of vessel movements, restarting oil wells, repairing damaged infrastructure and reaching agreements on de-mining operations. Some shipowners also continue to remain cautious about operating in the strait and the wider Persian Gulf.
Analysts also noted that global oil inventories were drawn down during the prolonged disruption to shipping through the Strait of Hormuz and will take time to recover. Stockpiles may continue to decline before additional Gulf supplies begin reaching international markets.
Last month, Saudi Aramco Chief Executive Officer Amin Nasser warned that disruptions in the Strait of Hormuz could delay the return of stability to global oil markets until 2027. He said prolonged interruptions could affect nearly 100 million barrels of oil supply every week. Saudi Aramco is the world’s largest oil producer.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)