LONDON: Oil prices fell sharply on Monday after US President Donald Trump indicated that Iran was “seriously talking” with Washington, suggesting a potential de-escalation in tensions that had previously pushed crude to multi-month highs.
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Brent crude futures declined $2.81, or 4.1%, to $66.51 per barrel, while US West Texas Intermediate (WTI) crude dropped $2.70, or 4.1%, to $62.51 per barrel. Both benchmarks fell significantly from last week’s peaks, when Brent reached a six-month high and WTI hovered near levels not seen since late September amid rising fears of a US-Iran confrontation.
Trump has repeatedly threatened military intervention in Iran if it fails to comply with nuclear agreements or continues crackdowns on protesters. The recent pullback, analysts say, has been reinforced by a stronger US dollar, which makes dollar-denominated oil more expensive for international buyers.
“The crude oil market is interpreting this as an encouraging step back from confrontation, easing the geopolitical risk premium built into prices and prompting profit-taking,” said Tony Sycamore, analyst at IG Markets. Trump’s remarks followed comments from Iran’s top security official Ali Larijani, confirming that arrangements for negotiations are underway.
OPEC+ decided on Sunday to maintain oil output unchanged for March, following a November freeze of planned increases for the first quarter of 2026 due to seasonally weaker consumption. Analysts caution that despite short-term geopolitical volatility, the underlying oil market remains well-supplied. Capital Economics noted in a January 30 briefing that “geopolitical risks mask a fundamentally bearish oil market” and predicted Brent crude prices will remain under pressure through 2026.
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Market participants now await further updates on US-Iran negotiations and OPEC+ policies, as the global oil market balances between geopolitical uncertainties and an oversupplied market.