Oil prices fell nearly 2% to a four-month low on Thursday as concerns over supply disruptions eased after Qatar said Iran and the U.S. had made progress in talks over the Strait of Hormuz.

Brent futures were 91 cents, or 1.3% lower, at $70.66 a barrel at 1316 GMT, while U.S. West Texas Intermediate crude fell $1.04, or 1.5%, to $67.54 a barrel. Both marked on Thursday their lowest levels since late February, just before the U.S.-Israeli war on Iran began.

The talks made “positive progress” on matters related to the memorandum that halted the war in June, a Qatar Foreign Ministry spokesperson said in a post on X, though there was no sign the two sides made headway towards a lasting peace.

The next meeting between Iran and U.S. negotiators will take place after July 9 funeral processions for Iran’s late Supreme Leader Ayatollah Ali Khamenei, the Qatar ministry added.

“Oil has been flowing out of the Strait of Hormuz, while at the same time we’re also pouring oil out of strategic reserves. And on top of that, crude oil buying from China and oil demand has not really properly revived yet,” said Bjarne Schieldrop, chief commodities analyst at SEB.

“This could be sort of a dynamical picture of price moving down sharply and then rebounding at some point.”

At least five supertankers carrying a total of 10 million barrels of Saudi oil loaded from Ras Tanura have exited the Strait of Hormuz, with Saudi Aramco switching to spot pricing to speed up sales in Asia, according to trade sources and shipping data.

U.S. crude stocks fell to their lowest last week since 2018 as domestic refinery demand rose, while gasoline inventories also declined, the Energy Information Administration said on Wednesday.

UBS cut its Brent forecasts, citing the increase in oil shipping through the strait.

The bank lowered its Brent crude price forecasts, cutting its third-quarter estimate by $25 per barrel to $80, reducing its forecast for the fourth quarter of 2026 by $10 per barrel to $80, and trimming its 2027 outlook by $10 per barrel to $75.

Analysts at HSBC expect the market “to absorb returning Middle East barrels through gradual restocking, alongside the end of IEA strategic stock releases in July”.

“As the near-term ‘mini-glut’ fades, Brent could move back towards $80/b or higher,” the HSBC note said.

Meanwhile, Nigeria has become the first OPEC member to join the International Energy Agency as an associate member, a step that deepens ties between the global energy watchdog and Africa’s largest oil producer.

Elsewhere, Ukrainian forces struck the Lukoil-Nizhegorodnefteorgsintez oil refinery in Russia’s Nizhny Novgorod region, Ukraine’s General Staff said on Thursday.

(Reporting by Anushree Mukherjee in Bengaluru, Sam Li and Lewis Jackson in Beijing, Sudarshan Varadhan in Singapore; Additional reporting by Stephanie Kelly; Editing by Edwina Gibbs, Alexander Smith and Emelia Sithole-Matarise)