Oil Prices Drop Amidst Potential US-Iran Peace Talks

Kathmandu. International oil markets saw a drop of nearly 5 percent at the start of new trading on Monday following news of the possibility of advancing peace talks between America and Iran. The market immediately saw a decline due to increased selling pressure among investors with expectations of reduced tension in the Middle East region and decreased supply disruptions.

West Texas Intermediate crude oil for July delivery fell by as much as 5.35 US dollars per barrel to 91.25 US dollars at one point, a decline of about 5.53 percent. Similarly, Brent crude oil also fell by 5.57 US dollars to 97.97 US dollars per barrel, a decline of about 5.38 percent.

US President Donald Trump said on Saturday that a peace agreement with Iran was largely finalized, but discussions are still pending between America, Iran, and other Middle Eastern countries for a final agreement. The proposed plan includes extending the 60-day ceasefire, reopening the Strait of Hormuz, allowing Iran to sell oil again, and negotiating Iran's nuclear program.

US Secretary of State Marco Rubio has stated that America is ready to enter serious negotiations regarding the nuclear program if Iran takes steps to reopen the Strait of Hormuz.

Meanwhile, Iran's Islamic Revolutionary Guard has reported that 33 ships passed through the Strait of Hormuz in the last 24 hours, indicating that the route is partially operational.

According to energy analysts, it is difficult for supply to return to normal quickly as before the war, as damage to production structures, production disruptions in some areas, and transportation problems have not yet been fully resolved.

Analysts predict that supply-demand imbalance will persist in the oil market, and prices may remain high for a long time, with a full decline only possible around 2027.