Oil prices fell on Monday after fresh diplomatic developments raised hopes of increased crude exports and higher global supply. Investors also reacted to signs that more oil could enter the market in the coming months.
Brent crude dropped by $1.53, or 1.9%, to $79.04 per barrel. Earlier in the day, Brent had climbed above $82 per barrel before reversing course as traders reassessed supply expectations.
Iranian Foreign Minister Abbas Araghchi said his country had secured approval to expand oil and petrochemical exports. He also announced plans to release some frozen assets and launch new reconstruction and development projects.
Tony Sycamore, a market analyst at IG, said recent diplomatic talks appeared to have made some progress. He noted that both sides agreed to establish a high-level committee to continue discussions.
However, Sycamore warned that it remains unclear whether these steps will produce meaningful results. He also pointed to continuing tensions in southern Lebanon, where clashes still threaten regional stability.
Shipping data showed that the number of vessels passing through the Strait of Hormuz declined sharply on Sunday. The drop followed Iran’s announcement that it had again closed the strategic waterway, citing alleged violations of peace agreements.
Lebanon’s state news agency reported that Israeli strikes on Saturday killed at least 20 people. The violence added another layer of uncertainty to global energy markets.
Analysts at ING said recent developments suggest that reaching a lasting agreement remains difficult. They warned traders not to expect an easy or quick resolution.
Despite ongoing tensions, oil prices fell by more than 8% last week. Markets grew more optimistic about the normalization of shipping routes through the Strait of Hormuz.
Iran’s National Oil Company said more than 25 million barrels of Iranian oil had moved through areas affected by US sanctions since last Monday.
Meanwhile, the United Arab Emirates, Kuwait, and Iraq increased their oil exports last week. Iraq also plans to raise crude production to between 4.2 million and 4.3 million barrels per day, adding further pressure on global oil prices.
