Crude Oil Prices Fall 1.9%, US-Iran Begin 60-Day Peace Negotiations

Crude oil prices moved lower on Monday as the United States and Iran started formal negotiations aimed at reaching a long-term peace agreement.

The global benchmark Brent crude fell around 1.91 percent to trade near the $79 per barrel mark. US benchmark West Texas Intermediate (WTI) crude also declined 0.70 percent to $75.32 per barrel during Asian trading hours.

The decline in oil prices came as the United States and Iran launched a 60-day negotiation process in Switzerland.

The talks are being led by US Vice President JD Vance and Iran’s Parliament Speaker Mohammad Bagher Ghalibaf along with Foreign Minister Abbas Araghchi. Pakistan and Qatar are acting as mediators in the discussions.

The negotiations had briefly faced uncertainty last week after Vance delayed his Switzerland visit. Iran had reportedly shown reluctance to continue talks because of Israel’s ongoing military operations in Lebanon.

Oil prices had already softened last week after Washington and Tehran signed a peace memorandum. However, prices recovered towards the end of the week as renewed Israeli strikes in Lebanon raised concerns about the durability of the agreement.

One of the key outcomes of the memorandum was the reopening of the Strait of Hormuz, one of the world's most important energy shipping routes. The waterway handles nearly 20 percent of global oil supplies transported from the Gulf region.

Under the agreement, Iran has committed to ensuring the safe movement of commercial vessels through the strait without imposing additional charges.

The memorandum also outlines a framework aimed at ending hostilities across several regional fronts, including Lebanon.

However, Israel has continued military operations against Hezbollah in Lebanon, keeping geopolitical risks elevated.

Market participants remain cautious as any fresh escalation in West Asia could once again disrupt energy supplies and affect oil prices.

The agreement gives both countries 60 days to negotiate a final peace settlement, with an option to extend the talks if necessary.