Global oil prices declined on Monday as renewed optimism over talks between the United States and Iran eased concerns about disruptions to energy supplies in the Middle East.

The negotiations, which began on Sunday in Switzerland after being delayed by renewed fighting between Israel and Hezbollah, are being led by US Vice President JD Vance and Iranian Parliament Speaker Mohammad Bagher Ghalibaf.

Pakistan and Qatar, serving as mediators, described the discussions as “positive and constructive” and announced that both sides had agreed to establish a communication channel to prevent incidents in the Strait of Hormuz, a vital shipping route through which about one-fifth of global oil and gas supplies pass.

The mediators also disclosed that a roadmap had been adopted to reach a final agreement within 60 days, paving the way for further technical negotiations.

Iranian Foreign Minister Abbas Araghchi welcomed the progress, saying diplomatic mediation had achieved “major progress” toward ending the conflict in Lebanon.

The positive developments weighed on oil prices, with Brent crude falling 1.7 per cent to $79.19 per barrel, while US West Texas Intermediate (WTI) dropped 0.6 per cent to $75.37 per barrel.

Asian stock markets traded mixed, with gains recorded in Tokyo, Seoul, Shanghai and Mumbai, while Hong Kong, Sydney, Singapore and Jakarta closed lower.