International oil prices declined by more than $1 per barrel on Thursday as easing geopolitical tensions reduced the risk premium in crude markets, while rising production from OPEC+ members and growing United States inventories heightened concerns about a potential supply surplus.
Brent crude futures fell by $1.47, representing a decline of 1.58 per cent, to $91.29 per barrel by 0426 GMT.
US West Texas Intermediate (WTI) crude futures also weakened, shedding $1.24, or 1.43 per cent, to $85.29 per barrel.
The decline reversed part of the previous session’s gains, when Brent advanced by 1.4 per cent and WTI rose by 0.6 per cent after both benchmarks had touched two-month lows earlier in the week.
Market sentiment was influenced by expectations that diplomatic efforts could reduce the likelihood of further escalation in the Russia-Ukraine conflict and tensions involving Iran.
Hiroyuki Kikukawa, chief strategist at Nissan Securities Investment, said investors were responding to expectations that behind-the-scenes diplomatic efforts could support a ceasefire between Russia and Ukraine, while the possibility of an escalation in the Iran conflict ahead of the planned United States-China summit appeared less likely.
However, he cautioned that uncertainty surrounding the Strait of Hormuz could limit the extent of any further decline in oil prices.
The strategic waterway remains a major route for international oil shipments, making developments affecting its security an important factor in global energy market pricing.
The latest price movement also reflects concerns about rising oil supply, particularly as increased OPEC+ production and growing US inventories raise questions about the balance between global demand and available crude.
Separately, Russian and Ukrainian negotiators agreed to a major prisoner exchange during two days of peace talks in Abu Dhabi, which ended on Wednesday.
Although the agreement represented progress on a humanitarian issue, US mediators said significant differences remained over other major matters, including territorial questions.
For oil traders, the combination of diplomatic developments, production trends and inventory data continues to shape expectations about near-term market direction.
The outlook remains sensitive to developments in the Middle East, the Russia-Ukraine conflict and decisions by major producing countries, as any significant disruption to supply could quickly alter the current balance of market sentiment.
