Oil prices drop over 3.5% as US authorizes 60-day general license for Iranian oil production

Brent crude oil fell around 3.5% to around $77.7 per barrel on Monday, trading near its lowest level since early March, as easing geopolitical tensions and a temporary US license for Iranian oil sales supported expectations of a gradual recovery in the Gulf supply flows.

The US Treasury Department's Office of Foreign Assets Control issued Iran General License X, authorizing transactions related to the production, sale, delivery or offloading of Iranian-origin crude oil, petrochemical products and petroleum products through Aug. 21.

This came as US-Iran nuclear talks in Switzerland showed further progress, with mediators Qatar and Pakistan saying the sides had agreed on a 60-day roadmap toward a potential final deal, alongside technical discussions and a monitoring mechanism.

US Treasury Secretary Scott Bessent said on the US social media firm X that Iran had committed to "free and open transit" in the Strait of Hormuz and agreed to allow International Atomic Energy Agency inspectors into the country.

Shipping data showing continued vessel movement through the Strait of Hormuz over the weekend also eased supply concerns, while market participants pointed to rising Iranian exports through the waterway, including discounted crude sales to China.