LONDON: Oil prices fell more than 4% on Monday after US President Donald Trump said Iran was “seriously talking” with Washington, signaling a de-escalation of tensions with the OPEC member. A stronger US dollar also weighed on prices.
Brent crude futures were down $3.34, or 4.8%, at $65.98 per barrel at 11:13 GMT, while US West Texas Intermediate (WTI) fell $3.37, or 5.2%, to $61.84 per barrel. Both benchmarks had posted their largest monthly gains since 2022 in January, with Brent up 16% and WTI 13%.
Analysts said the decline reflected a combination of easing geopolitical risk, improved supply conditions and a stronger dollar. “The weakness is the disappearance of the geopolitical risk premium as the US and Iran show tentative willingness to negotiate, combined with the dollar’s strength”, said PVM analyst Tamas Varga.
UBS analyst Giovanni Staunovo noted that easing supply disruptions in the US and Kazakhstan also weighed on prices. Priyanka Sachdeva of Phillip Nova added that Trump’s earlier threats to Iran had supported oil prices in January, but the recent pullback is reinforced by renewed dollar strength, making oil more expensive for non-US buyers.
Global supply concerns resurfaced after OPEC+ agreed on Sunday to keep March output unchanged, following a freeze on planned increases from January through March 2026 due to seasonally weaker consumption.
“Geopolitical risks mask a fundamentally bearish oil market”, Capital Economics said, citing last year’s 12-day conflict between Israel and Iran in a well-supplied market, which will continue to pressure Brent prices through 2026. — Reuters
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