Oil prices slide 2% on Iran-Oman talks to reopen Strait of Hormuz

Oil benchmarks extended their slide on Wednesday, with Brent down 2.0 per cent at $86.80 a barrel early in the session, according to Business Recorder. West Texas Intermediate also traded lower at $80.87 after losing $1.49. Both contracts had already fallen more than 3 per cent the previous day.

The decline came as Iran said it had restarted talks with Oman on managing the Strait of Hormuz, lifting hopes that the waterway could reopen. Prior to the February conflict, roughly a fifth of worldwide oil and LNG cargoes moved through that route. On Tuesday, the two countries said they had discussed a temporary shared route through the waterway and agreed to clear mines from it.

A tanker took a hit from an unidentified projectile, leaving it disabled near Oman's Ash Shishah, the UK Maritime Trade Operations said. Washington also widened sanctions on Iran on Monday, though penalties were not due to be imposed right away. The American Petroleum Institute put the US crude stock increase at roughly 4.2 million barrels for the period ending August 21, while a Reuters poll of analysts had expected a gain of about 600,000 barrels.