Oil prices eased on Thursday on reports the US and Israel will try to restart talks on a possible ceasefire in Gaza.
Brent oil settled 58 cents, or 0.8 percent lower at $74.38 a barrel while the US West Texas Intermediate (WTI) crude slipped 58 cents, or 0.8 percent to end at $70.19.
The oil market has been gripped by concerns about the ongoing conflict in the Middle East and the possibility that it could result in oil supply disruptions.
Negotiators will gather in Doha, the capital of Qatar, in the coming days to try to restart talks toward a deal for a ceasefire and the release of hostages in Gaza.
Iran fired close to 200 missiles at Israel on October 1 and this led the international crude benchmark, Brent crude to surge about 8 percent during the week ended October 4 on worries Israel would attack Iran’s oil infrastructure.
It fell about 8 percent in the week ended October 18 on reports Israel would not hit energy infrastructure, easing fears of supply disruptions.
Iran, a member of the Organisation of the Petroleum Exporting Countries (OPEC), produces about 4 million barrels per day and backs several groups fighting Israel, including Hezbollah in Lebanon, Hamas in Gaza and the Houthis in Yemen. An attack by Israel will send prices up.
Analysts believe that other Middle Eastern producers Saudi Arabia and the United Arab Emirates (UAE), have enough spare capacity to offset potential losses of supply from Iran.
However, in case the conflict escalates to Iranian proxies targeting oil infrastructure in Iran’s Middle Eastern neighbours, or if Iran moves to block or restrict oil cargo traffic in the Strait of Hormuz, oil prices could spike to triple digits and record highs.
In a related development, Saudi Arabia’s oil export revenues fell to the lowest level in more than three years in August caused by underwhelming oil demand and continued supply constraints from the world’s top crude exporter.
Traders also weighed uncertainty ahead of the US presidential election on November 5 between former president Donald Trump and current Vice President Kamala Harris.