The price of oil edged up by more than a dollar a barrel on Monday after American and Iranian officials sat down together in Switzerland for their first formal discussions since signing a short-term peace arrangement, even as the meeting was clouded by a fresh war of words from Washington and a new threat from Tehran to shut one of the world’s most important shipping lanes.
Brent crude, the international benchmark used to price oil sold across much of the world, climbed $1.09 to reach $81.66 a barrel in Asian trading, having briefly touched $82.30 at the start of the session. The gains came as markets reopened following a weekend of intense, and at times chaotic, diplomatic activity at the Swiss mountain resort of Bürgenstock, overlooking Lake Lucerne.
Reuters, which first reported the details of the oil market movements, noted that the price rise came against a backdrop of real uncertainty over whether the recently agreed ceasefire between the two countries was holding at all.
The meeting in Switzerland brought together American and Iranian officials alongside representatives from Qatar and Pakistan, the two countries acting as go-betweens in the negotiations. United States Vice President JD Vance led the American side of the talks, accompanied by two of President Donald Trump’s senior envoys, Jared Kushner and Steve Witkoff. Iran’s delegation was led by Mohammad Bagher Ghalibaf and included the country’s foreign minister, Abbas Araqchi.
The discussions took place under a memorandum of understanding signed just days earlier, on 18 June, between President Trump and Iranian President Masoud Pezeshkian. That document committed both sides to a 60-day period of talks aimed at resolving a range of deep-rooted disputes, including Iran’s nuclear programme, and called for the Strait of Hormuz, the narrow waterway through which roughly a fifth of the world’s oil passes each day to be kept open throughout that period.
The problem was that even as Mr Vance was travelling to Switzerland for talks, Iran announced it had once again closed the strait. Tehran said it had done so in response to fresh Israeli strikes on Lebanon, arguing that Washington had not done enough to stop them. American officials disputed that the closure was real, but shipping data pointed to an immediate and visible drop in vessel crossings. For a brief period on Sunday, only a single small tanker was tracked passing through with its location signal switched on, compared with dozens in the preceding days.
The timing rattled markets and set a tense tone before the talks had even begun. Then, while Mr Vance was inside the resort holding discussions, President Trump gave a television interview in which he threatened to resume military strikes against Iran if the country did not comply with the agreement. In a separate post online, he went further, warning Iranian leaders that they would “not have a country” if the strait was closed. He also suggested the United States might begin charging ships a fee to use the waterway if a final deal was not struck within the allotted 60 days.
Inside the talks, however, a more measured message was being delivered. Mr Vance told reporters that progress was being made on the Lebanon ceasefire and that record amounts of oil had been moving through the strait in the days since the original agreement was signed. He said 16 million barrels had passed through the waterway the day before, a figure he described as higher than anything recorded even before the conflict began in late February.
After several hours of talks, including a pause during which both delegations withdrew to hold internal consultations, mediators from Qatar and Pakistan issued a joint statement saying the parties had agreed on a broad plan, or roadmap, aimed at reaching a permanent settlement within 60 days. The statement said technical discussions would continue throughout the week at the same Swiss resort and that a high-level committee would be set up to oversee the process.
The outcome was enough to reassure oil markets, at least for the time being. Prices that had climbed sharply earlier in the day pulled back somewhat after the roadmap announcement, with Brent futures briefly turning slightly negative before steadying. Analysts noted that the wider picture for oil had shifted dramatically since the war began. Prices had fallen by roughly a fifth from their 2026 peaks over the course of May and into June, driven by growing hopes that a deal would eventually unlock the full flow of oil through the strait again. Before the conflict started on 28 February, the disruption caused by the closure had removed an estimated 14 million barrels a day from global supply, according to the International Energy Agency.
Significant infrastructure damage across the Gulf region, alongside ongoing security concerns for ships attempting to navigate the waterway, means any full return to normal shipping patterns is likely to take time. One senior market analyst cautioned that even if the strait were declared fully open, the actual reopening would be only partial for some time, given the scale of the disruption and reported minefields that still need to be cleared.
The next several weeks, as technical talks continue and both sides test whether the other is genuinely committed to the 60-day process, will determine whether oil markets can count on a more stable flow of supply from the region, or whether the stop-start pattern of the past few months has further to run.
