Oil prices fell as talks progressed over an end to the Iran war. Brent crude, the international standard, traded down $1.55, or 2%, to $79.02 per barrel. It was at roughly $70 a barrel before the start of the war in late February.
The price for a barrel of U.S. crude fell 74 cents to $75.11.
High-level negotiations in Switzerland between the U.S. and Iran concluded early Monday, with lower-level technical talks set for the rest of the week. Mediators Qatar and Pakistan said “encouraging progress” was made during the negotiations.
Meanwhile, while Iran said the Strait of Hormuz, a key waterway for oil and gas transport, was shut again over the weekend, the U.S. said that traffic had continued.
“Moving towards a more permanent deal will be challenging, with very real risks of a flare-up in hostilities,” ING commodities strategists Warren Patterson and Ewa Manthey wrote in a commentary on Monday.
Thomas Mathews, head of markets for Asia Pacific from Capital Economics, believes energy flows in the strait are more likely to recover only gradually. “With the controversial — and fragile — U.S.-Iran peace process now underway, attention is turning to how quickly tankers return to the Strait of Hormuz to load energy supplies,” he wrote in a note.
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