US-Iran Talks Lead to Oil Price Decline Amid Easing Supply Risks

Oil prices fell on Monday after high-level talks between the US and Iran concluded in Switzerland. The two countries' officials met under the terms of a memorandum of understanding to extend a ceasefire from April for at least another 60 days.

Iranian Foreign Minister Abbas Araqchi said his country had secured waivers for oil and petrochemical exports, the release of some frozen assets, and the launch of a reconstruction and development plan for Iran. These developments have eased concerns about a supply shortage in global markets, leading to a decline in oil prices.

Prices were down after rising earlier due to threats from US President Donald Trump to restart the war on Iran and an announcement from Tehran that it had again closed the Strait of Hormuz. Brent crude was trading at $79.22 a barrel, while West Texas Intermediate futures were up 40 cents at $77.00 a barrel.

Analysts attribute the drop in oil prices to the progress made between the US and Iran in their talks. The recovery of Iranian oil supply is expected to be challenging, with ANZ predicting around 2 million to 3 million barrels per day to be restored in the first four weeks.