Oil falls as U.S.-Iran talks show progress in Switzerland

Oil prices fell sharply Monday as Vice President JD Vance said U.S.-Iran talks in Switzerland had laid a good foundation for a final agreement, immediately cooling some of the risk premium tied to the Middle East. Brent crude traded near $79 a barrel and West Texas Intermediate hovered around $75.50 to $76 after both benchmarks had earlier moved higher.

The first round of high-level talks ended Monday at the Bürgenstock resort near Lucerne after a lengthy session, with mediators saying the sides made encouraging progress and discussed a roadmap toward a final deal within 60 days. That prospect matters because even a tentative thaw can alter expectations across fuel markets, from gasoline costs to inflation pressure and the margins of airlines, shippers and other energy-sensitive industries.

The Strait of Hormuz sat at the center of the market reaction. Vance said the waterway was open, and market coverage said millions of barrels of crude and natural gas were still flowing through the narrow passage, one of the world’s most critical chokepoints for energy shipments. Oil had already swung higher in recent days when shipping through the strait slowed, the talks got off to a rough start and Donald Trump’s threats against Iran sharpened fears of a broader supply shock.

The price drop remained fragile because traders were reacting to progress, not a signed agreement. Some reports said Iran’s delegation had agreed to let International Atomic Energy Agency inspectors back into the country, and others said the U.S. Treasury Department had issued a temporary 60-day license authorizing the production, delivery and sale of Iranian oil. If those steps lead to a lasting deal, the relief could extend beyond crude into gasoline and inflation readings; if the talks fail, the market could just as quickly reverse and send energy prices back up.