Oil prices steadied on Tuesday after posting their sharpest decline in nearly a week, as signs of progress in US-Iran peace negotiations raised hopes of additional crude supply returning to global markets. Brent crude traded near $78 a barrel after falling more than 3% in the previous session, while West Texas Intermediate hovered above $74.
The move came after Washington issued a 60-day waiver allowing certain sales of Iranian oil and petroleum products, citing what it described as "productive talks" between the two sides in Switzerland.
The waiver provides Tehran with a much-needed economic lifeline and could pave the way for more Iranian crude to reach global buyers. The measure allows a broad range of purchasers, including US refiners, to buy and pay for Iranian oil, although some market participants may remain cautious about potential geopolitical risks.
Both US and Iranian officials described the first round of negotiations as constructive, though differences remain. US Vice President JD Vance said Iran had agreed to allow international nuclear inspectors into the country, a claim that Tehran subsequently disputed.
ALSO READ: US Permits Iran To Sell Oil Under 60-Day Licence After Round 1 Of Talks
Markets are also watching signs of improving energy flows through the Strait of Hormuz, the key shipping route that was disrupted during the conflict. The near-closure of the waterway had choked off energy supplies from the Persian Gulf and sent oil prices sharply higher earlier this year.
Supply from the region has already started to recover. Iran reportedly shipped more than 30 million barrels of crude over the past week, while producers including Kuwait and the United Arab Emirates have found alternative ways to move cargoes. Qatar has also begun sending more empty liquefied natural gas carriers through Hormuz, signalling growing confidence that traffic through the route is gradually normalising.
Negotiators are expected to continue discussions over Iran's nuclear programme, the durability of the ceasefire between Israel and Hezbollah in Lebanon, and long-term security arrangements for shipping through Hormuz.
ALSO READ: No New Nuclear Commitments: Iran Counters Vance's Claim On Switzerland Talks
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