Brent crude oil fell more than 2 percent to around $61 a barrel on Monday after Iran said a deal on its nuclear program could be agreed this week if the West lifts sanctions, which could boost the country’s oil exports.
Oil prices were also depressed by a stronger dollar and reports of a rise in Libyan crude output, traders said.
Brent crude hit a low of $60.86 a barrel and was at $62.00 by 9 a.m. ET, down $1.58. Front-month Brent jumped 18 percent in February, the largest monthly rise since May 2009.
U.S. crude was down 60 cents at $49.16 a barrel.
“If there is the political will to accept that an agreement and sanctions cannot go together, then we can have an agreement this time,” Iranian Foreign Minister Mohammad Javad Zarif said.
U.S. Secretary of State John Kerry said there had been some progress in the nuclear talks but there was a long way to go.
Iranian oil exports have been restricted by sanctions for several years as the United States and Europe responded to Tehran’s nuclear program, although Iran says its nuclear plans are peaceful.
Analysts say Iran could increase its oil sales fairly quickly if sanctions were lifted and may eventually be able to raise exports by up to 1 million barrels per day (bpd). A Reuters survey last week showed Iran pumped around 2.8 million bpd in February.