Oil prices were slightly lower on Wednesday, after Iran said it would not meet with U.S. delegates for talks in Qatar, amplifying concern about the peace process. International benchmark Brent crude futures with September delivery traded 0.3% lower at $72.72 per barrel at around 9:28 a.m.

(4:28 a.m. ET). The contract dropped roughly 21% last month, notching its largest monthly decline since March 2020.

U.S. West Texas Intermediate futures with August delivery fell 0.5% to $69.17, erasing earlier gains. The contract dropped more than 20% in June, reflecting its worst monthly performance since late 2021.

The moves come after Iranian officials said Tehran and Washington still needed to work out the terms of the interim peace deal signed last month before they could then tackle more difficult topics, such as possible limits to its nuclear program, Reuters reported. President Donald Trump's son-in-law Jared Kushner and U.S. special envoy Steve Witkoff arrived in Doha on Tuesday, although a Qatari government spokesperson said they would meet mediators, not directly with Iranians.

The U.S. and Iran struck a 14-point memorandum of understanding on June 17 to pause fighting that had disrupted global oil flows through the strategically vital Strait of Hormuz. Located in the Persian Gulf between Oman and Iran, the Strait of Hormuz is one of the world's most critical energy choke points.

The narrow waterway typically handles around 20% of the world's oil traffic. Strait of Hormuz traffic ING strategists Warren Patterson and Ewa Manthey said the oil market continues to take an optimistic view on a supply recovery in the Middle East despite recent flare-ups between the U.S. and Iran.

They said in a research note published Wednesday that tanker vessel movements in the strategically vital Strait of Hormuz still appear limited. "Admittedly, there has been a slight pickup in inbound tanker traffic, suggesting that shipowners are becoming increasingly confident about moving vessels into the Persian Gulf," Patterson and Manthey said. "If this trend accelerates, it becomes a clear headwind—and potentially a direct challenge—to our view that oil prices should rise from current levels," they added.