Oil prices were falling in Monday trading after reports that Iran has agreed with the US to allow international nuclear inspectors back into the country.
Brent crude oil was down 3.3% at $77.90 a barrel in intraday trade, after rising to as high as $81.11 earlier in the day. West Texas Intermediate fell 2.7% to $73.84, having traded at $77.82 earlier in the session.
US Vice President JD Vance said Monday that Iran agreed to admit inspectors from the International Atomic Energy Agency in the country, according to media reports.
"That is a major milestone for the American people, and the first step in permanently denuclearizing or permanently ending a nuclear weapons program in Iran, and that's exactly what we wanted to do," Vance said, according to reports.
Vance is heading the US team in talks with Iran under the memorandum of understanding signed between the two countries last week. The negotiations took place in Switzerland.
Additionally, Vance said progress was made on a mechanism to prevent a broader military escalation in Lebanon and keep the ongoing ceasefire negotiations between Israel and Hezbollah from spiraling out of control, CNN reported.
On the status of the Strait of Hormuz, Vance said the crucial waterway is open, and negotiations with Iran focused on setting up a "coordination mechanism" for demining and resuming trade, the CNN report added.
Iran said on Saturday that it closed the Strait of Hormuz after Israel attacked southern Lebanon, according to various media outlets.
Last week, BMO Economics lowered the full-year WTI price forecast to $80 from $85.50 previously and revised down the 2027 projection to $75 from $77.50, assuming higher probabilities for oil tanker traffic through the strait returning to normal quickly.
"The memorandum of understanding has put a lid on crude oil prices for the time being, but where prices ultimately land will depend on how quickly the flow of tanker traffic resumes in the near term," BMO Senior Economist Art Woo said.
