Oil Prices Fall As US-Iran Talks Yield Export Waivers And Sanctions Relief

Oil prices declined on Monday after negotiations between the United States and Iran concluded in Switzerland, with Tehran announcing that it had secured waivers allowing continued exports of oil and petrochemical products.

Brent crude fell by $1.68, or 2.09 per cent, to $78.89 per barrel by 0633 GMT, retreating from earlier gains that had pushed prices above $82 per barrel amid concerns over tensions in the Middle East and uncertainty surrounding the talks.

US West Texas Intermediate (WTI) crude futures also traded lower, slipping to $76 per barrel ahead of the contract’s expiration. The more actively traded August contract dropped to $75.16 per barrel.

Analysts attributed the decline to growing optimism that diplomatic progress between Washington and Tehran could ease supply concerns and reduce the risk premium that has supported oil prices in recent weeks.

The talks, which began on Sunday and ended on Monday, marked the first direct negotiations between senior US and Iranian officials under a new framework aimed at preserving a fragile 60-day ceasefire.

Iranian Foreign Minister Abbas Araqchi said the discussions resulted in waivers for Iranian oil and petrochemical exports, the release of some frozen assets, and the launch of reconstruction and development initiatives.

Market observers noted that any broader easing of sanctions could pave the way for additional Iranian crude to return to global markets, boosting supply at a time when demand growth remains relatively modest.

Before the negotiations concluded, concerns over supply disruptions intensified after Iran announced another closure of the Strait of Hormuz, citing alleged violations of the interim peace agreement by the United States and Israel. Shipping data showed a sharp decline in vessel traffic through the strategic waterway following the announcement.

Regional tensions also persisted, with reports indicating that Israeli airstrikes in Lebanon killed at least 20 people a day after a ceasefire with Hezbollah took effect.

Despite the diplomatic breakthrough, analysts cautioned that securing a long-term agreement remains uncertain and warned that the temporary ceasefire could still face significant challenges.

Oil prices had already fallen more than eight per cent last week amid expectations of increased global supply, supported by delayed Gulf cargoes reaching the market and prospects of fewer restrictions on Iranian exports.

Iranian officials said more than 25 million barrels of crude had moved through the Gulf region since the start of the week, while major producers including the United Arab Emirates, Kuwait and Iraq have increased supply offers to customers.

Iraq also announced plans to gradually raise crude production to between 4.2 million and 4.3 million barrels per day as part of efforts to stabilise output and meet market demand.