Brent crude futures fell sharply in Monday trading as markets digested the conclusion of the first round of high-level talks between the United States and Iran in Switzerland.
The benchmark contract dropped $1.68, or 2.09%, to $78.89 a barrel by 0633 GMT, reversing earlier gains that had pushed prices to $82.30 at the start of the session.
The initial price surge was driven by reports of a rocky start to the negotiations, which had briefly reignited concerns over potential supply disruptions in the Strait of Hormuz.
However, sentiment shifted quickly once the talks concluded, with traders interpreting the diplomatic engagement as a de-escalation signal.
Tehran’s announcement that it had secured waivers for certain sanctions further bolstered the bearish case for oil, reducing the immediate risk premium embedded in energy prices.
This repricing marks a significant shift from the volatility seen in recent weeks, where geopolitical tensions between the US and Iran had kept a lid on supply expectations.