Oil prices fell and stocks rose on Monday after negotiators said that “great progress” had been made in talks with Iran and the United States, despite a growing war of words between Donald Trump and Iranian officials.
Brent crude futures were down 0.7% to $80.07 a barrel after mediators from Pakistan and Qatar said the parties had agreed over the weekend on a roadmap to reach a final deal within 60 days.
Optimism around negotiations saw stock prices rise in Asia, where Japan’s Nikkei climbed 1.8% this morning, while Chinese blue chips stocks were up 1.6%. South Korea’s Kospi rose 0.6%.
But US stock futures were muted as S&P 500 futures traded down 0.5%, Nasdaq was 0.6% lower, and futures linked to the Dow Jones industrial average dropped 0.4%.
Europe’s STOXX 600 index was last down 0.1%, while London’s FTSE 100 index dropped to a one week low, bogged down by political uncertainty after Prime Minister Keir Starmer said he would resign.
Talks in Switzerland to end the war between the US and Iran had earlier been overshadowed by Tehran declaring the Strait of Hormuz closed again on Saturday, in response to Israel’s continued attacks in Lebanon.
But mediators said both sides had agreed during talks on a mechanism to end the fighting in Lebanon and open a communications line for safe passage through the Strait of Hormuz.
Pakistan’s prime minister, Iran’s foreign ministry and US vice president JD Vance all hailed “progress” in the talks over the weekend.
Vance added that he “could see a future where everyone can work together to promote peace and prosperity”.
A small number of ships were seen crossing the strait on Monday, though movement was far more restricted than it appeared last week, and a fraction of the pre-war average.
And Israel’s president said Israel was not opposed to a diplomatic end to the Iran war, but any agreement must ensure Tehran cannot use funds from the deal for military purposes or to support proxies.
Sunday appeared to be the quietest day in Lebanon for some time, with no reports of major violence.
Technical talks are expected to continue for the rest of the week in the Swiss mountain resort of Buergenstock, a joint statement said.
Susannah Streeter, chief investment strategist at Wealth Club, assessed: “There does appear to be further progress being made during talks in Switzerland towards a lasting settlement, and oil prices have dipped again.”
“It is clear there is still a long way to go, and more obstacles may emerge before a long-term deal is signed.”
