Global oil prices fell on Monday after U.S. officials reported progress in talks with Iran and confirmed that the Strait of Hormuz remained open, easing fears of disruptions to global crude supplies.
Senior U.S. and Iranian officials concluded their first round of negotiations in Switzerland on Monday under a memorandum of understanding reached last week, aimed at extending a fragile ceasefire agreement for at least 60 days.
Brent crude dropped $1.46, or 1.8%, to $79.11 per barrel by 1127 GMT, reversing earlier gains that had been driven by renewed geopolitical tensions and concerns over the temporary closure of the Strait of Hormuz.
The market also came under pressure after Iran announced it had secured waivers for oil and petrochemical exports, access to some frozen assets, and the launch of a reconstruction and development programme.
Analysts said Iran has resumed oil exports following the lifting of restrictions linked to the recent U.S. naval blockade, adding fresh supplies to an already well-supplied market.
Iran’s National Iranian Oil Company reported that more than 25 million barrels of crude had crossed the former blockade zone since last week, highlighting a rapid recovery in export flows.
Additional supply is expected from other Gulf producers, with the United Arab Emirates, Kuwait and Iraq increasing crude availability to customers in recent days.
Iraq has begun a gradual restoration of oil production, targeting output of between 4.2 million and 4.3 million barrels per day, according to government officials.
ANZ estimates that between 2 million and 3 million barrels per day of supply could return within the next month, although a full recovery is likely to be slower due to logistical and infrastructure challenges.
Despite easing supply risks, regional tensions remain elevated after Israeli strikes in Lebanon killed at least 20 people over the weekend, underscoring the fragile security environment across the Middle East.