NEW DELHI: Oil prices fell on Monday after high-stakes talks between the United States and Iran concluded in Switzerland, with Tehran announcing it had secured crucial waivers for its oil and petrochemical exports. The development has significantly eased fears of a severe supply shortage in global energy markets.

Brent crude fell by $1.68, or 2.09pc, to $78.89 a barrel at 0633 GMT. The drop reversed earlier gains, when prices rose to $82.30 a barrel at the start of the negotiations.

Initial trading was unsettled by US President Donald Trump’s threat to restart hostilities against Iran, along with Tehran’s brief announcement that it had again closed the Strait of Hormuz.

US West Texas Intermediate (WTI) crude futures were at $76 a barrel, down 60 cents, ahead of the contract expiry later on Monday.

The more active August contract fell 69 cents to $75.16 a barrel. Trading volumes were lower due to the US market being closed on Friday for a public holiday.

Diplomatic breakthrough eases supply fears

Market analysts noted that the sudden downturn in prices was directly tied to the unexpected progress made in Europe. Sugandha Sachdeva, founder of New Delhi-based research firm SS WealthStreet, stated that the decline was primarily driven by improving prospects for a diplomatic breakthrough, reviving hopes that sanctions on Iran could eventually be permanently eased.

According to mediators, high-ranking US and Iranian officials wrapped up their first round of official talks in Switzerland on Monday.

The session had commenced on Sunday under the framework of a memorandum of understanding reached last week, which aimed to extend ceasefire established in April for at least another 60 days.

Iranian Foreign Minister Abbas Araghchi said Tehran had secured waivers for oil and petrochemical exports, along with the release of some frozen assets and a reconstruction and development plan for the country.