Brent Crude Falls as US-Iran Talks Ease Supply Fears and Signal Export Relief for Tehran

Brent crude oil prices slipped on Monday after diplomatic talks between the United States and Iran concluded in Switzerland, with Tehran announcing it had secured waivers for oil and petrochemical exports. The development eased immediate concerns over global supply disruptions tied to Middle East tensions.

Brent futures dropped $1.19, or 1.48 percent, to $79.38 a barrel by 07:16 a.m. Saudi time. Prices had briefly climbed to $82.30 earlier in the session following a volatile start to negotiations, which included threats from US President Donald Trump to resume military action against Iran and Tehran’s announcement that it had again closed the Strait of Hormuz.

US West Texas Intermediate crude showed mixed movement ahead of contract expiry, trading at $76.73 a barrel, up 13 cents, while the more active August contract fell 21 cents to $75.64. There was no settlement on Friday in US markets due to a public holiday.

Market analysts said easing geopolitical tensions had shifted sentiment. “The decline has been driven primarily by improving prospects for a diplomatic breakthrough between the United States and Iran, reviving hopes that sanctions on Iran could eventually be eased,” said Sugandha Sachdeva, founder of SS WealthStreet, a New Delhi-based research firm.

The talks, held under a framework agreed last week to extend a fragile ceasefire, were completed on Monday following two days of negotiations. Mediators said discussions aimed at stabilising regional tensions and preventing further escalation remained ongoing.

Iranian Foreign Minister Abbas Araqchi said the country had obtained waivers allowing continued oil and petrochemical exports, along with partial access to frozen overseas assets and support for reconstruction and development initiatives. Analysts estimate the return of Iranian supply could eventually bring as much as 1.5 million barrels per day back into global markets, increasing availability at a time when demand growth remains subdued.

Before the agreement was reached, shipping data indicated a sharp decline in vessel traffic through the Strait of Hormuz after Iran briefly closed the waterway, citing violations of the interim ceasefire.

At the same time, regional instability persisted. Lebanese authorities reported at least 20 deaths following Israeli strikes, despite a recent ceasefire agreement involving Hezbollah. ING analysts warned that while diplomatic progress had been made, risks of renewed escalation remain significant during the 60-day truce window.

Oil prices had already fallen more than 8 percent the previous week on expectations that sanctions relief could unlock additional supply and ease shipping constraints. Iranian officials said more than 25 million barrels of crude had already moved through restricted routes since the start of the easing measures.

Additional supply also came into focus as Iraq, Kuwait and the United Arab Emirates signalled plans to increase output, with Iraq targeting production of up to 4.3 million barrels per day in the near term.