Oil prices slip for second day as investors weigh Hormuz flows

Oil prices continued their downward trend on Wednesday, August 5, 2026, as optimism over diplomatic efforts to end the Iran conflict reduced concerns about disruptions to crude supplies through the strategic Strait of Hormuz.

Brent crude futures fell 32 cents, or 0.4 per cent, to $79.04 per barrel by 0630 GMT, while U.S. West Texas Intermediate (WTI) crude declined 58 cents, or 0.8 per cent, to $75.19 per barrel.

The losses followed a sharp sell-off on Tuesday, when both benchmark contracts settled more than five per cent lower amid easing geopolitical tensions.

Market sentiment improved after Qatar disclosed that mediators were making progress toward ending the conflict. However, Tehran dismissed United States President Donald Trump’s claim that negotiations were already underway

Brent crude closed below the $80-per-barrel mark on Tuesday for the first time since July 13, reflecting the fading geopolitical premium that had supported prices in recent weeks.

The Head of Market Insights at Phillip Nova, Priyanka Sachdeva, said while the immediate market reaction suggested reduced fears of supply disruptions, uncertainty remained over the longer-term outlook.

Sachdeva warned that any breakdown in diplomatic negotiations could quickly reverse the current price decline if oil supplies are eventually affected.

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IG analysts also noted that the future of the Strait of Hormuz remains a major concern for traders.

According to the analysts, the key issue is whether Iran will continue to demand some level of control over the vital shipping lane and whether the United States will resist such a proposal.

Before the outbreak of the conflict, nearly one-fifth of global oil and liquefied natural gas exports passed through the Strait of Hormuz, making the waterway one of the world’s most important energy corridors.

Traders are now looking ahead to official inventory figures from the U.S. Energy Information Administration later on Wednesday, which could provide fresh direction for oil prices.