Brent crude falls $1.53, or 1.90%, to $79.04 a barrel; US West Texas Intermediate crude futures at $76.53 a barrel
Oil prices declined on Monday after US-Iran negotiations in Switzerland ended with Tehran announcing it had obtained waivers allowing continued oil and petrochemical exports, easing fears of tighter global energy supplies.
Brent crude futures fell $1.53, or 1.9%, to $79.04 per barrel by 0656 GMT. Earlier in the trading session, prices had jumped to $82.30 per barrel as investors reacted to uncertainty surrounding the talks.
The initial surge was triggered by US President Donald Trump’s warning that military action against Iran could resume, along with Tehran’s announcement that it had once again closed the Strait of Hormuz, a vital shipping route for global oil exports.
However, sentiment improved after the negotiations concluded and Iran said it had secured export waivers, reducing concerns over potential supply disruptions and prompting a pullback in crude prices.
US West Texas Intermediate (WTI) crude futures for July edged down 7 cents to $76.53 per barrel ahead of the contract’s expiry later on Monday. The more actively traded August WTI contract also declined, falling 55 cents to $75.30 per barrel. There was no settlement in the US market on Friday because of a public holiday.
Senior US and Iranian officials concluded their first round of negotiations in Switzerland on Monday, mediators said. The talks began a day earlier under the framework of a memorandum of understanding agreed last week, extending the fragile ceasefire that has been in place since April for at least another 60 days.
Following the discussions, Iranian Foreign Minister Abbas Araqchi announced that Tehran had secured waivers allowing continued oil and petrochemical exports, the release of part of its frozen overseas assets, and the launch of a national reconstruction and development programme.
IG market analyst Tony Sycamore said the weekend negotiations appeared to have made some headway, with both sides agreeing to establish a high-level committee to continue dialogue. However, he warned that it remains uncertain whether the diplomatic progress will lead to meaningful improvements on the ground, particularly in southern Lebanon, where hostilities between Israel and Hezbollah continue despite the ceasefire.
Before the talks concluded, shipping traffic through the Strait of Hormuz fell sharply after Iran announced it had once again closed the strategic waterway, accusing Israel and the United States of violating the interim peace agreement.
Meanwhile, Israeli airstrikes killed at least 20 people in Lebanon on Saturday, according to the country’s state-run National News Agency (NNA), just one day after a ceasefire with Hezbollah came into force in an effort to end months of escalating conflict.
Analysts at ING said recent developments highlight the challenges of reaching a lasting agreement, warning that the risk of renewed hostilities remains significant throughout the 60-day ceasefire period.
Despite those concerns, oil prices dropped by more than 8% last week as traders anticipated increased global supplies from the release of cargoes stranded in the Gulf and the possible easing of US sanctions on Iranian oil under a broader agreement.
Hamid Bovard, head of the National Iranian Oil Company, said more than 25 million barrels of Iranian crude had crossed the virtual blockade line since Monday.
At the same time, the United Arab Emirates, Kuwait and Iraq have increased crude supplies to customers, while Iraq plans to gradually raise oil production to between 4.2 million and 4.3 million barrels per day, according to the country’s deputy oil minister for upstream affairs.
