Oil falls nearly 3% as Iran and Oman resume Hormuz talks

Oil prices fell about 2% on Wednesday after Iran said it resumed talks with Oman on managing the Strait of Hormuz. Brent crude fell to $86.27 a barrel. West Texas Intermediate fell to $80.87. Both benchmarks lost more than 3% on Tuesday. Iran and Oman discussed a joint temporary navigational corridor on Tuesday. The two countries agreed to clear the strait of mines. The waterway has historically carried about one-fifth of global oil and liquefied natural gas shipments. Volumes fell after fighting began in February. The American Petroleum Institute reported that US crude inventories rose by about 4.2 million barrels in the week ended August 21. Analysts polled by Reuters had forecast a 600,000-barrel increase. The Energy Information Administration was due to release official data on Wednesday at 10:30 a.m. ET. The United Kingdom Maritime Trade Operations reported that an unidentified projectile struck and disabled an oil tanker on Tuesday. The incident occurred nine nautical miles northeast of Ash Shishah near Oman's entrance to the strait. The US expanded sanctions targeting Iran on Monday. The penalties will not take effect immediately. The US began returning personnel to some Middle East diplomatic missions evacuated during the conflict. Two people familiar with the matter said the move suggests Washington sees a lower near-term risk of escalation. Some embassies will initially operate below full capacity. Mitsuru Muraishi of Fujitomi Securities said hopes for progress in the talks triggered selling. Muraishi also said uncertainty over the outlook prompted bargain buying that could keep prices range-bound in the near term.