Oil prices fell in Asian trade after reports of progress in talks between Iran and Oman, which increased expectations of a possible agreement between Tehran and Washington to restore shipping through the Strait of Hormuz, Reuters reported, quoted by BTA.
Brent futures, which is a reference for Europe, fell by 33 cents, or 0.42 percent, to $79.12 a barrel.
U.S. light crude oil fell by 42 cents, or 0.56 percent, to $74.80 a barrel.
Iran and Oman have reached an understanding on the geographical coordinates of a sea route through the Strait of Hormuz and are preparing a joint statement, Iranian Foreign Ministry spokesman Esmail Baghaei said. He said the agreement could be finalized provided that third parties do not interfere, Reuters added.
“There has been some selling pressure following reports that talks between Iran and Oman are progressing,“ said Yuki Takashima, an economist at “Nomura Securities“.
According to him, prices have returned to levels seen on June 17, when the United States and Iran signed an interim peace agreement. Investors are watching to see if the two sides can reach a final agreement.
The proposed agreement between Iran and Oman, aimed at ending the conflict between the United States and Iran, would give Iran control over ships entering the Persian Gulf through the Strait of Hormuz, a senior Iranian source and two regional officials told Reuters.
Such an agreement would be one of the most significant concessions ever made to Tehran.
The United States did not immediately comment on the proposal. President Donald Trump has said a deal to open the strait is close, but US officials have repeatedly stressed that Washington will not accept Iran controlling access to one of the world's most important energy supply routes.
Iran has warned Gulf states that another US strike on its territory would trigger retaliation against key energy infrastructure in the region, five sources said.
In doing so, Tehran is seeking to raise the cost of possible military action by putting Washington's closest regional allies at risk.
“The progress of US-Iran talks is now the decisive factor, as significant progress is needed before disrupted energy flows can be effectively restored,“ ING analysts said.
Gulf crude and condensate exports remained broadly stable in July but were about 40 percent below pre-war levels, data from the shipping.
Meanwhile, the Iranian-backed Houthis in Yemen said they had launched missile attacks on two Saudi oil tankers - one off the Red Sea port city of Yanbu and the other in the Gulf of Aden.
Saudi Arabia has not confirmed either incident.
Takashima said concerns that the Houthi attacks could affect shipping in the Red Sea were limiting optimism about an imminent end to disruptions in Middle East shipping lanes.
Separately, data from the U.S. Energy Information Administration showed that U.S. crude inventories rose as refiners slightly cut processing and imports rose.