Oil held a decline on signs of progress toward an agreement to end the Iran war, which included a US waiver allowing some sales of crude and fuels from the Islamic Republic.Brent crude traded below $78 a barrel after falling 3.3 per cent on Monday, the biggest drop in almost a week, while West Texas Intermediate was near $74. The 60-day license permits the sale of some Iranian oil and petroleum products, citing “productive talks” in Switzerland, offering Tehran an economic lifeline.US and Iranian officials both flagged progress in the first round of talks toward a lasting agreement to end the conflict that started at the end of February, but some discrepancies have emerged. US vice president JD Vance said Iran agreed to allow nuclear inspectors into the country, a claim disputed by Tehran.The waiver permits almost anyone to purchase and pay for Iranian oil, including US refineries, although some might be unwilling to take on the risk. Supply from the Persian Gulf has increased recently, with producers such as Kuwait and the United Arab Emirates finding workarounds to get shipments out. Iran has also shipped more than 30 million barrels over the past week.“There is still a long road ahead in negotiations, and the market may be pricing in a surplus before it arrives, just as it priced in a deficit before barrels were actually lost,” said Rebecca Babin, managing director and senior energy trader at CIBC Private Wealth. “Crude has a habit of overshooting.”There’s expected to be protracted wrangling on Iran’s nuclear capabilities as talks continue, along with the status of a ceasefire in Lebanon between Israel and Hezbollah and the safe reopening of the Strait of Hormuz. The near-closure of the waterway choked off energy supplies and upended markets.Qatar is bringing more empty liquefied natural gas tankers into the Persian Gulf through Hormuz, adding to signs that flows through the vital waterway are set to be gradually restored. Four tankers passed through the strait without hiding their location, and more are on the way.Progress toward peace has led to a weakening of timespreads, with the gap between Brent’s two nearest contracts edging closer to parity. The same metric for the Middle East’s Dubai and Murban crudes have already flipped into a contango structure. - Bloomberg