Oil Declines as US Waives Iran Crude Sales Amid Peace Talks Progress
Oil prices fell as the US issued a 60-day waiver for some Iranian crude sales, signaling progress in Iran war peace talks. Brent crude dropped below $78, and WTI neared $74. The waiver, following talks in Switzerland, offers Iran an economic lifeline amid increased Persian Gulf supply and ongoing negotiations.
Oil prices declined following signs of progress in talks to end the Iran war, which included a 60-day US waiver allowing some sales of Iranian crude and fuels. Brent crude traded below $78 a barrel after a 3.3 percent drop on Monday, while West Texas Intermediate was near $74.
The waiver, citing «productive talks» in Switzerland, offers Tehran an economic lifeline by permitting almost anyone, including US refineries, to purchase Iranian oil. US and Iranian officials reported progress in the first round of talks, though discrepancies emerged, such as US Vice President JD Vance's claim that Iran agreed to nuclear inspectors, which Tehran disputed.
Supply from the Persian Gulf has increased, with Kuwait and the UAE finding workarounds for shipments, and Iran shipping over 30 million barrels last week. Rebecca Babin of CIBC Private Wealth noted that the market might be pricing in a surplus prematurely. Protracted negotiations are expected on Iran's nuclear capabilities, the Israel-Hezbollah ceasefire in Lebanon, and the reopening of the Strait of Hormuz.
Qatar is bringing more empty LNG tankers through Hormuz, indicating a gradual restoration of flows through the waterway. This progress toward peace has weakened timespreads, with Brent's nearest contracts nearing parity, and Dubai and Murban crudes already in contango.