Oil futures hovered near a three-month low on Monday after high-level US-Iran talks in Switzerland yielded export waivers for Tehran and a 60-day ceasefire roadmap.
The Brent futures contract declined about 1.9% at $79.02 per barrel but was still down to early-March levels. Murban futures closed at its lowest since late February at $73.63/bbl on June 19 and were not trading by the time of publication of this oil price update.
"Oil and petrochem exports are waived, blockade lifted, some frozen assets released, and major reconstruction & development plan launched for Iran," the Iranian Foreign Minister Seyed Abbas Araghchi posted on X.
However, conflict in southern Lebanon sparked temporary doubts about the pact, briefly pushing Brent back above the $80 threshold before it slipped again.
"Despite a bumpy start, with Trump issuing fresh warnings towards Iran and Tehran responding with renewed threats to close the Strait of Hormuz, negotiations nevertheless showed signs of progress," Saxo Bank analysts noted.
American and Iranian delegations completed their opening round of dialogue in Switzerland on Monday. Operating under a freshly minted memorandum of understanding, both sides structured a roadmap to sustain a fragile April truce for an additional 60 days.
"Crude oil prices are expected to remain under pressure as supply through the Strait of Hormuz recovers. However, the realities of the market's challenges will see prices eventually find support," ANZ analysts noted.
The market is actively bracing for the reopening of the Strait of Hormuz, which will release millions of stranded barrels currently trapped in the Persian Gulf.
"That expectation helped drive a sharp increase in bearish positioning, with hedge funds raising gross Brent short positions to a pandemic-era high in the week to 16 June," Saxo Bank analysts added.
Last week crude prices declined below $80 per barrel to a three-month low after an interim US-Iran peace deal dismantled the Persian Gulf blockade.