Key Moments
- Brent crude traded at $79.96 a barrel by 0815 GMT, retreating from an earlier high of $82.30.
- Iran said it had obtained waivers for oil and petrochemical exports and resumed shipments previously blocked by a U.S. naval blockade.
- ANZ projected 2 million–3 million barrels per day of output could return in the first four weeks, though full restoration was described as unlikely this year.
Market Reaction to Switzerland Talks
Global oil benchmarks declined on Monday after U.S.-Iran discussions in Switzerland concluded with Tehran announcing new waivers for crude and petrochemical exports, reducing concerns over a potential supply crunch.
By 0815 GMT, Brent crude had fallen 61 cents to $79.96 per barrel. The benchmark had earlier climbed to $82.30 at the start of the session, supported by U.S. President Donald Trump’s threats to restart the war on Iran and Tehran’s announcement that it had once again closed the Strait of Hormuz.
U.S. West Texas Intermediate (WTI) crude futures stood at $77.20 per barrel, up 60 cents ahead of the contract’s expiry later on Monday. The more heavily traded August WTI contract added 19 cents to $76.04 per barrel.
“Progress between the U.S. and Iran in the talks in Switzerland is likely the main factor weighing on oil prices today,” UBS analyst Giovanni Staunovo said.
Details of U.S.-Iran Engagement
Mediators said senior U.S. and Iranian officials completed their first round of discussions in Switzerland on Monday. The talks began on Sunday under a memorandum of understanding agreed the previous week, which aimed to prolong a fragile ceasefire that started in April for at least another 60 days.
Iranian Foreign Minister Abbas Araqchi said Iran had secured waivers covering oil and petrochemical exports, the release of some frozen assets, and the initiation of a reconstruction and development program for the country.
Staunovo noted that Iran had resumed crude exports that had been blocked earlier in the month due to a U.S. naval blockade. “The ’release’ of those barrels is additional supply for the market,” he said.
Iranian and Regional Supply Developments
More than 25 million barrels of Iranian crude have crossed the virtual blockade line since Monday, the head of the National Iranian Oil Company told state television on Sunday.
Additional supply signals have also emerged from other producers in the region. The United Arab Emirates, Kuwait and Iraq have offered more oil to buyers over the past week.
Iraq intends to gradually restore crude production to between 4.2 million and 4.3 million barrels per day, its deputy oil minister for upstream affairs said in a statement on Sunday.
| Item | Detail |
|---|---|
| Brent price (by 0815 GMT) | $79.96 per barrel (down 61 cents) |
| Brent intraday high | $82.30 per barrel |
| Front-month WTI | $77.20 per barrel (up 60 cents) |
| August WTI | $76.04 per barrel (up 19 cents) |
| Iranian barrels past blockade line | More than 25 million barrels |
| Iraq output target | 4.2 million–4.3 million barrels per day |
Outlook for Supply Recovery
ANZ expects approximately 2 million–3 million barrels per day of production to return in the first four weeks. It cautioned that the rebound would remain difficult, projecting an additional 2 million–3.5 million barrels per day could be recoverable in the third quarter of 2026, provided conditions remain stable. At the same time, it estimated that 1 million–2 million barrels per day of supply could be permanently or semi-permanently lost.
“Early gains will be driven by logistics (shipping) rather than production,” ANZ added. “Later gains will depend on upstream and refinery recovery. Full restoration is unlikely this year.”
Geopolitical Backdrop
In a further sign of regional instability, Israeli strikes in Lebanon killed at least 20 people on Saturday, Lebanon’s state news agency NNA said, one day after a ceasefire with Hezbollah took effect.
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