Market News

Brent crude slipped to around $79 a barrel, reversing an earlier gain of as much as 2.2%, while West Texas Intermediate was near $75. The parties have agreed on a roadmap toward reaching a final deal in 60 days, and technical talks will continue for the remainder of the week, according to a statement issued by Qatar and Pakistan, which are mediating discussions in Switzerland.

The high-level meeting follows a memorandum of understanding signed by both sides last week, which was tested over the weekend after Iran claimed to have closed the Strait of Hormuz, accusing Israel of violating a ceasefire in Lebanon. Iranian Foreign Minister Abbas Araghchi said in a post on X that mediation in Switzerland has delivered major progress to end the conflict in Lebanon.

Negotiations got off to a shaky start when Iranian media reported the Islamic Republic halted discussions following Trump’s threat, but people familiar with the matter said they continued into the early hours of Monday in Switzerland. Talks covered topics including mechanisms to ensure the strait remains open and how to enforce the ceasefire between Israel and Hezbollah in southern Lebanon, according to a senior US diplomat engaged in the discussions.

The war in the Middle East has choked off supply in a region responsible for a third of the world’s oil production. Crude futures have come off in recent weeks — although prices remain higher than pre-war levels — after global refiners found temporary workarounds, and as the prospect of an end to the conflict fueled optimism over a rapid return to normality.

Despite Iran claiming to have closed Hormuz again, millions of barrels of oil continued to flow through the waterway over the weekend. Still, Chubb Ltd. Chief Executive Officer Evan Greenberg told Fox News that security remains volatile, despite US efforts to open shipping channels.

“We believe markets remain overly optimistic over the sustained resumption of oil flows from the Middle East,” said Vivek Dhar, an analyst with Commonwealth Bank of Australia. Uncertainties over production and whether vessels are willing to return to the region are set to hamper flows, he added.

A peace deal would in theory unleash a gush of supply where there’s less demand for now, especially given a slump in purchases by top importer China. About 80 million barrels of crude are set to suddenly hit the market should Hormuz fully reopen, threatening to leave refiners swamped.

Meanwhile, Persian Gulf producers are preparing for a production ramp-up, with Kuwait canceling earlier force majeure notices. Abu Dhabi National Oil Co. told customers to resume loading supply from inside the Persian Gulf, while selling spot crude in a series of tenders.

--With assistance from Serene Cheong.