DTN Oil Update
Oil Deepens Loss on Iran Sanctions Waiver, Peace Talks
SECAUCUS, N.J. (DTN) -- Crude futures extended their losses Monday as a temporary U.S. waiver on Iranian oil sanctions and progress in diplomatic talks calmed energy markets rattled over the weekend by Tehran's threat to shut the Strait of Hormuz again due to Israeli actions in Lebanon.
NYMEX WTI for July delivery settled down $1.78, or 2.3%, at $74.82 bbl. The front-month contract has unwound approximately 30% of the war premium that drove prices to a four-year peak of $119.48 bbl in March.
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That peak followed what the International Energy Agency termed the most severe supply disruption in oil history. Prior to the onset of U.S.-Israeli airstrikes against Iran in late February, WTI traded near $67 bbl.
August ICE Brent futures dropped by $2.67, or 3.3%, to close at $77.90 bbl. Brent crude traded near $72 bbl before the conflict before surging to an April peak of $126.41, its highest level since 2022.
Downstream, NYMEX ULSD futures contract for July slid $0.0342 to settle at $3.0931 gallon, while July RBOB futures edged $0.0064 lower to $2.8970.
Israel and Hezbollah renewed a fragile ceasefire following violent flare-ups in southern Lebanon on Friday that briefly threatened the broader U.S.-Iran diplomatic framework. Although the truce largely holds, Israeli military forces remain deployed inside Lebanese territory while both nations prepare for upcoming trilateral security talks.
U.S. Vice President JD Vance, meanwhile, reported progress in talks to end the Iran war, following a series of late-night discussions among U.S. and Iranian delegations, alongside mediators from Qatar and Pakistan.
The U.S. Treasury Department also officially announced a temporary 60-day general license authorizing transactions involving Iranian crude oil, petroleum products, and petrochemical products through Aug. 21.
The newly issued Office of Foreign Assets Control directive permits the production, delivery, and sale of Iranian energy commodities, alongside U.S. dollar payment processing and shipping insurance services. Under the preliminary framework, Iran has committed to maintaining open transit through the Strait of Hormuz and allowing international nuclear inspectors back into the country.
The resumption of flows through Hormuz follows more than 100 days of separate blockades by Iran and the United States that froze transit of 20 million bpd of petroleum liquids. Analysts expect a gradual recovery for shut-in production, as shippers remain cautious about entering the Persian Gulf before a final, permanent agreement is secured.