Global Oil Prices Drop 1% on US-Iran Progress; Brent at $70.78 📉

• Overall Figures: Global oil benchmarks fell for a third straight day on Thursday. Brent futures dropped by 1.1% (down 79 cents) to US$ 70.78 a barrel, while U.S. West Texas Intermediate (WTI) crude fell 1.2% (down 84 cents) to US$ 67.74 a barrel. • Key Drivers: Indirect talks between the US and Iran in Doha concluded with "positive progress" regarding the Strait of Hormuz, which handles 20% of global oil supply. A memorandum halting previous conflict in June remains intact, ensuring the strait stays open and crude flows continue. • Market Impact: Expectations of oversupply and heightened competition for market share are driving prices down. Consequently, UBS cut its Brent price forecast for the September quarter by US$ 25 and for the December quarter by US$ 10, now projecting a H2 average of US$ 80 a barrel. Furthermore, OPEC+ is likely to agree to higher output targets from August during Sunday's meeting. • Sri Lankan Context: As a major net importer of crude oil and refined petroleum products, any sustained reduction in global energy benchmarks directly eases pressure on Sri Lanka's foreign exchange reserves, improves the trade balance, and lowers domestic production and transport costs across key manufacturing sectors. _Note: Data based on provisional market reports._