Oil prices fell on Monday after US-Iran talks in Switzerland ended, with Tehran saying it had secured waivers for oil and petrochemical exports. This eased concerns about a possible shortage in global oil supply.
Brent crude dropped $1.53, or 1.90%, to $79.04 a barrel by 0656 GMT. Prices had earlier risen to $82.30 at the start of trading after a shaky start to the talks, including threats from US President Donald Trump and Iran’s announcement that it had again closed the Strait of Hormuz.
US West Texas Intermediate (WTI) crude futures were at $76.53 a barrel, down 7 cents ahead of expiry. The more active August contract fell 55 cents to $75.30 a barrel. There was no US market settlement on Friday due to a holiday.
High-level US and Iranian officials completed their first round of talks in Switzerland on Monday, according to mediators. The discussions began on Sunday under a memorandum of understanding aimed at extending a fragile ceasefire from April for at least 60 days.
Iranian Foreign Minister Abbas Araqchi said Iran had secured waivers for oil and petrochemical exports, along with the release of some frozen assets and a reconstruction and development plan for the country.
Market analyst Tony Sycamore said: “High-level talks between the US and Iran in Switzerland over the weekend appear to have produced some progress, with both sides agreeing to establish a high-level committee,”
He added that results on the ground remain uncertain, especially in southern Lebanon where tensions continue between Israel and Hezbollah.
Before the talks, shipping data showed a sharp drop in vessels passing through the Strait of Hormuz after Iran announced a closure, citing violations of the interim peace deal.
The situation in Lebanon also remains tense, with Israeli strikes killing at least 20 people on Saturday despite a ceasefire with Hezbollah taking effect.
ING analysts said: “Recent developments show that moving towards a more permanent deal will be challenging, with very real risks of a flare-up in hostilities during the 60-day ceasefire,”
Despite ongoing risks, oil prices still fell more than 8% last week due to expectations of increased supply and possible easing of US sanctions on Iranian oil.
Iranian oil officials said over 25 million barrels have moved through previously restricted routes since last week. Meanwhile, countries including the UAE, Kuwait, and Iraq have increased oil supply to customers.
Iraq also plans to gradually raise crude production to between 4.2 and 4.3 million barrels per day, according to its deputy oil minister.
