Oil Drops on Signs of Progress in US-Iran Talks

Crude oil slipped below $76 per barrel on Monday, giving up earlier gains as investors reacted positively to signs of progress in ongoing peace talks between the US and Iran. According to a joint statement from Qatar and Pakistan, which are facilitating negotiations in Switzerland, both sides have agreed to a roadmap aimed at securing a final agreement within 60 days. Oil prices started the session sharply higher after President Donald Trump threatened fresh strikes if Hezbollah continues attacking Israel and warned Tehran against closing the Strait of Hormuz again. Iranian media later reported that Tehran had suspended talks in response to Trump's remarks, though sources familiar with the negotiations said discussions were still underway. Meanwhile, millions of barrels of crude continued to pass through the Strait of Hormuz over the weekend, while producers across the Persian Gulf prepared to increase output.

Crude oil prices opened the week more than 1.5% higher, climbing above $78 per barrel as uncertanity over the reopening of Strait of Hormuz remined. US and Iran resumed talks in Switzerland, but tensions persisted. Iranian state media said Iranian negotiators demanded an end to the war in Lebanon as a condition for further talks, while President Trump renewed threats against Iran even as Vice President JD Vance praised the talks' progress. Iran said the US had failed to secure a ceasefire in Lebanon and announced it had again halted traffic through the strait. Tehran also said Sunday's talks would exclude substantive issues such as its nuclear programme. Meanwhile, President Trump warned of renewed US strikes unless Iran curbs its proxies in Lebanon. He also threatened tolls in the absence of a deal and warned Tehran against closing the Strait of Hormuz.

Crude oil prices were near $77 per barrel on Friday and were heading toward a weekly decline of roughly 8% after Israel and Hezbollah reached a ceasefire agreement set to begin on Friday. The truce, if maintained, could remove a major obstacle to broader peace efforts between the US and Iran. Meanwhile, Tehran said vessels passing through the Strait of Hormuz would require mandatory insurance policies, which are currently free but could incur charges later, reinforcing its claims over the strategic waterway. Market data suggested shipping activity slowed after an earlier surge in tanker movements, with no outbound vessels seen leaving the Persian Gulf on Friday morning. In contrast, nearly 10 million barrels of crude were observed transiting or positioned near the strait on Thursday, including the first Saudi-owned tankers to move since the conflict began more than three months ago. Uncertainty continues after planned US-Iran talks in Switzerland were canceled.