LUCERNE, June 22 — Oil prices dropped today after United States Vice-President JD Vance said progress has been made in talks with Iran and that the Strait of Hormuz is open.
High-ranking US and Iranian officials wrapped up their first round of talks in Switzerland today, mediators said. The discussions began yesterday under the terms of a memorandum of understanding reached last week to extend a tenuous ceasefire from April for at least another 60 days.
Brent crude was down US$1.46, or 1.8 per cent, at US$79.11 a barrel by 1127 GMT. Prices had climbed to US$82.30 at the start of trading because of threats from US President Donald Trump to restart the war on Iran, as well as an announcement from Tehran that it had again closed the Strait of Hormuz.
US West Texas Intermediate crude futures were at US$76.84 a barrel, up 24 cents, ahead of the contract’s expiry later today. The more-active August contract lost 57 cents, or 0.8 per cent, to US$75.28 a barrel.
Adding to price losses, Iranian Foreign Minister Abbas Araqchi said his country has secured waivers for oil and petrochemical exports, the release of some frozen assets, and the launch of a reconstruction and development plan for Iran.
Iran has resumed exports of its oil, which were blocked earlier this month due to the US naval blockade, UBS analyst Giovanni Staunovo said. “The ‘release’ of those barrels is additional supply for the market,” he added.
Supply recovery remains challenging
More than 25 million barrels of Iranian oil have passed through the virtual blockade line since June 15, the head of the National Iranian Oil Company told state TV yesterday.
The United Arab Emirates, Kuwait and Iraq have offered more oil to customers in the past week.
Iraq plans to restore crude production gradually to between 4.2 million and 4.3 million barrels per day, its deputy oil minister for upstream affairs said in a statement yesterday.
ANZ expects around two million to three million barrels per day to be restored in the first four weeks.
Recovery will remain challenging, it said, with a further two million to 3.5 million bpd potentially recoverable in the third quarter of 2026 subject to stability, while one million to two million bpd of supply could be permanently or semi-permanently lost.
“Early gains will be driven by logistics (shipping) rather than production,” ANZ added. “Later gains will depend on upstream and refinery recovery. Full restoration is unlikely this year.”
Meanwhile Israeli strikes in Lebanon killed at least 20 people on Saturday, Lebanon’s state news agency NNA said, one day after a ceasefire with Hezbollah took effect.
