Oil prices fell sharply as negotiations between the United States and Iran showed signs of progress.
Oil prices fell sharply Monday as progress in negotiations between the United States and Iran eased concerns about global supply disruptions and prompted investors to reassess geopolitical risks in energy markets.
Brent crude, the international benchmark, traded at $77.11 per barrel, down 3.7%, while U.S. benchmark West Texas Intermediate (WTI) crude fell 3.3% to $73.36 per barrel.
The decline came after the U.S. Treasury Department announced a temporary 60-day license allowing the production, delivery and sale of Iranian oil through Aug. 21 as part of ongoing diplomatic talks between Washington and Tehran in Switzerland.
“In line with the productive discussions taking place in Switzerland, Iran has committed to maintaining free and open transit through the Strait of Hormuz and allowing inspectors from the International Atomic Energy Agency (IAEA) into the country,” U.S. Treasury Secretary Scott Bessent said in a social media statement.
The announcement followed the conclusion of the first session of talks in Bürgenstock, Switzerland, where both sides described discussions as constructive and reported encouraging progress.
According to a joint statement released by mediators Pakistan and Qatar, the parties agreed to establish a High-Level Committee that will oversee the mediation process and help develop a roadmap toward a comprehensive agreement within 60 days.
The framework also includes the creation of a direct communication channel between the parties to prevent misunderstandings and ensure the safe passage of commercial vessels through the Strait of Hormuz.
The reopening of the strategic waterway has become a key issue for global energy markets. The Strait of Hormuz handles roughly one-fifth of the world’s oil and natural gas shipments and has been at the center of market volatility since tensions escalated earlier this year.
While shipping traffic has not yet fully returned to normal levels, several Iranian oil tankers have successfully passed through the strait in recent days, marking the first such crossings since U.S. restrictions were imposed amid the broader Middle East conflict.
The prospect of increased Iranian oil exports and improved navigation through the strait has eased supply concerns and contributed to the sharp decline in crude prices, which had surged well above pre-conflict levels.
Before hostilities intensified and shipping disruptions emerged, Brent crude had been trading near $72 per barrel. Market participants are now closely monitoring negotiations for signs that a broader agreement could further stabilize global energy markets.
