Oil prices moved higher during Wednesday's Asian deals as faltering negotiations between Iran and the United States renewed concerns over crude supplies from the Middle East, while a larger-than-expected draw in US inventories also supported the market.
By 2:55 pm AEST (4:55 am GMT), Brent crude futures had risen 24 cents, or 0.3%, to US$73.19 a barrel, while US West Texas Intermediate (WTI) crude gained 24 cents, or 0.4%, to US$69.74 a barrel.
Despite the day's gains, both benchmarks recorded steep losses during the second quarter. Brent crude fell approximately $31.02 a barrel, or 29.8%, while WTI declined $31.88, or 31.5%, over the three-month period.
Market sentiment was weighed by uncertainty surrounding efforts to negotiate a lasting peace agreement between Washington and Tehran.
U.S. President Donald Trump's son-in-law Jared Kushner and special envoy Steve Witkoff travelled to Doha on Tuesday for what the White House described as "high level" talks.
However, Iran and host nation Qatar confirmed discussions would take place through mediators rather than in direct meetings with Iranian officials.
Analysts at ING said markets continued to anticipate a gradual recovery in Middle East oil supplies despite lingering geopolitical risks.
"The oil market continues to take an optimistic view on a supply recovery from the Persian Gulf, despite recent flare-ups between the U.S. and Iran. Indirect talks in Doha this week have reportedly been positive.
"Tanker vessel movements in the Strait of Hormuz still appear limited. Total tanker crossings, which include both inbound and outbound movements, are estimated at around 11 on Tuesday, down from a peak of 24 last Wednesday.
"Admittedly, there has been a slight pickup in inbound tanker traffic, suggesting that shipowners are becoming increasingly confident about moving vessels into the Persian Gulf.
"If this trend accelerates, it becomes a clear headwind—and potentially a direct challenge—to our view that oil prices should rise from current levels."
The Strait of Hormuz remains a key focal point for energy markets after Iran indicated it intends to impose tolls on shipping through the strategic waterway.
US Vice President JD Vance dismissed that possibility, telling The Michael Knowles Show: "This is not going to end in a place where the Iranians are collecting tolls on ships going through the Strait of Hormuz."
Vance also said oil shipments through the strait had returned to pre-conflict levels as tanker traffic gradually recovered.
Supply concerns were also reinforced by fresh inventory data from the American Petroleum Institute (API), which showed U.S. crude stockpiles fell by 6.072 million barrels during the week ended 26 June. The decline exceeded market expectations for a draw of 4.1 million barrels.
Investors will now turn their attention to official inventory figures from the U.S. Energy Information Administration, scheduled for release on Wednesday (Thursday AEST), for further insight into demand conditions in the world's largest oil consumer.
