Oil prices slipped on Monday following renewed optimism around United States–Iran peace negotiations, as mediators announced progress toward a “roadmap” for a final agreement. The development eased fears of prolonged conflict in the Middle East and influenced broader financial markets, which saw a mixed but largely positive start to the week.
The diplomatic talks, which had initially been scheduled for Friday, were delayed after escalating tensions involving Israel and Hezbollah. They eventually commenced on Sunday in Switzerland, with delegations led by US Vice President JD Vance and Iranian parliamentary speaker Mohammad Bagher Ghalibaf.
Market sentiment had been fragile in recent days due to uncertainty over the conflict, which had previously driven energy prices higher and raised concerns about global inflation. However, optimism returned after reports that hostilities between Iran and its regional adversaries had cooled.
Although there were early concerns that Iran had withdrawn from negotiations following warnings from US President Donald Trump about possible strikes if Hezbollah continued attacks on Israel, mediators from Pakistan and Qatar later confirmed that discussions proceeded in what they described as a “positive and constructive atmosphere.”
According to the mediators, both sides agreed on a framework aimed at addressing Iran’s nuclear programme and reopening the Strait of Hormuz, a critical shipping route through which roughly one-fifth of global oil and gas supplies pass.
They also announced plans to establish a communication channel between Washington and Tehran to prevent further escalation in the strategically important waterway. A “High Level Committee” reportedly agreed on a 60-day roadmap toward a final agreement, paving the way for technical-level discussions to begin.
Iranian Foreign Minister Abbas Araghchi said on X that “mediation has delivered major progress to end the Lebanon War.”
Following the announcement, global oil benchmarks declined in early trading. West Texas Intermediate fell by 0.5 percent to $75.47 per barrel, while Brent crude dropped by 1.5 percent to $79.38 per barrel.
Equity markets, however, responded positively. Asian stocks mostly advanced, with Tokyo’s Nikkei 225 rising 2 percent, Seoul’s Kospi gaining 1.3 percent, and Taipei’s index climbing 2.7 percent, driven largely by strong performances in technology and semiconductor companies such as SK hynix, TSMC, and Advantest.
Other regional markets, including Sydney, Wellington, and Jakarta, also posted gains. In contrast, Hong Kong, Shanghai, and Singapore recorded slight declines.
Analysts noted that while optimism is supporting risk assets, uncertainty remains.
National Australia Bank strategist Skye Masters said markets were likely to remain cautious, adding that the situation in the Middle East “remains fragile,” with the US dollar expected to stay supported and oil prices potentially volatile.
In the United Kingdom, sterling weakened amid political uncertainty following speculation about leadership changes. Reports suggested growing pressure within the Labour Party that could lead to Prime Minister Keir Starmer stepping down in favor of Andy Burnham, raising investor concerns over possible increases in public spending and national debt.
Key Market Figures (Around 0230 GMT)
West Texas Intermediate: down 0.5% at $75.47 per barrel
Brent crude: down 1.5% at $79.38 per barrel
Tokyo Nikkei 225: up 2.0% at 72,648.47
Hong Kong Hang Seng: down 1.4% at 23,597.25
Shanghai Composite: down 0.1% at 4,088.17
Seoul Kospi: up 1.3% at 9,171.14
Euro/dollar: $1.1462
Pound/dollar: $1.3220
Dollar/yen: 161.54
Euro/pound: 86.71 pence
