Oil prices fell 3 percent on Monday after progress was seen in the first round of Pakistan-mediated talks between the United States and the Islamic Republic of Iran in Geneva, Switzerland.
As oil supplies return to normal thanks to the opening of the Strait of Hormuz and the United States’ announcement of lifting sanctions on Iranian oil, Brent crude prices fell by $2.67 to $77.90 per barrel.
It follows the first round of talks between U.S. and Iranian officials on Monday, with both sides hinting at significant progress toward reaching a deal and permanently ending hostilities.
Oil prices have shown strong volatility in previous trading sessions, with markets reacting strongly to changing geopolitical signals around the US-Iran negotiations.
Earlier in the week, crude benchmarks initially climbed on uncertainty surrounding the negotiations, before reversing their gains as optimism about de-escalation began to dominate sentiment.
Any sustained progress toward a deal between Washington and Tehran is seen by traders as likely to reduce the likelihood of supply disruptions and support a more stable flow of Iranian crude to global markets.
However, analysts warn that the situation remains very fluid, with energy markets likely remaining sensitive to any breakdown in negotiations or delays in sanctions relief mechanisms.
