Oil Price Decline May Be Temporary Amid Uncertainty Over US-Iran Talks -- Economist

By Abdul Hamid A Rahman

KUALA LUMPUR, Aug 3 (Bernama) -- The sharp decline in global crude oil prices today may be temporary, as market sentiment remains highly sensitive to developments surrounding the proposed talks between the United States and Iran, an economist said.

At 7.36 pm, Brent crude fell 5.12 per cent to US$83.52 per barrel, while US West Texas Intermediate crude declined 5.80 per cent to US$79.76 per barrel.

Brent crude had previously surged to US$94.68 per barrel on July 22, 2026, from US$71.57 per barrel on July 1, 2026.

Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said oil prices fell mainly following Donald Trump’s remarks that fresh talks with Iran were expected to begin on August 3.

“The announcement raised hopes that an agreement could be reached to reopen the Strait of Hormuz, easing concerns over possible disruptions to global energy supplies.

“The main reason for the decline was none other than President Trump’s remarks that new talks with Iran would begin later today, raising hopes for the reopening of the Strait of Hormuz,” he told Bernama.

However, Mohd Afzanizam said it remained to be seen whether the downward trend in crude oil prices could be sustained, given the uncertainty surrounding the proposed negotiations.

“President Trump has a tendency to make abrupt announcements, which could easily weaken market sentiment and reverse the current trend,” he said.

Mohd Afzanizam added that crude oil prices would likely remain volatile, as any setback in the diplomatic process or escalation in geopolitical tensions could restore the risk premium and push prices higher again.

Trump announced yesterday that talks with Iran would take place on Monday after calling off a planned US military strike to pursue an agreement addressing Iran’s nuclear programme and reopening the Strait of Hormuz.

-- BERNAMA