Oil set for steepest quarterly loss since 2020 as traders focus on US-Iran talks

Oil prices were heading on Tuesday for their biggest quarterly loss since the COVID-19 pandemic in early 2020, with investors eyeing potential U.S.-Iran talks in Doha amid a strained interim ceasefire in the four-month-old war.

Brent August crude futures, which expire on Tuesday, were up 0.22%, or 16 cents, at $73.31 a barrel as of 1201 GMT. However, the contract was on track for a third straight monthly decline, down about 20% so far in June.

The more actively traded September contract gained 0.61%, or 45 cents, to $74.36 a barrel.

U.S. West Texas Intermediate for August rose 0.52%, or 37 cents, to $71.12 a barrel. However, the contract was down for the second straight month, by about 19%, so far in June.

Brent was down about 38% so far this quarter, while U.S. West Texas Intermediate crude had fallen about 29%. Both Brent and WTI prices are close to pre-war levels.

“I wouldn’t say the market has priced out a risk premium, but previously stranded ships have become available with the increase in ships moving out of the Gulf, creating a temporary wave of new supply,” UBS analyst Giovanni Staunovo said.

Morgan Stanley said it now models an implied global oil market surplus of 4.8 million barrels per day in 2027.

Top U.S. envoys who have arrived in Doha will not hold a high-level meeting with Iran, a Qatari official said on Tuesday, casting doubt on the progress of efforts to bring a lasting halt to the Iran war and fully reopen the Strait of Hormuz.

Instead, there will be technical talks this week on issues including regional security that could later be elevated to senior level, Qatar’s Foreign Ministry spokesperson Majed Al Ansari told a media briefing.

The uncertainty over whether the two sides would meet highlighted the fragility of a June 17 agreement to pause fighting that has disrupted global oil flows through the Strait of Hormuz and posed a political challenge for U.S. President Donald Trump ahead of November’s congressional elections.

Analysts have cut their 2026 oil price forecasts for the first time since the Iran war began, after five straight monthly increases, as the reopening of the strait eased concerns over prolonged supply disruptions, a Reuters poll showed on Tuesday.

Meanwhile, Iraq’s SOMO has offered wide discounts to its official selling prices to encourage term buyers to lift Basrah crude from its terminal inside the Middle East Gulf in July, according to trade sources and a document reviewed by Reuters.