Oil prices fell 5% on Monday after US President Donald Trump said Iran was in “serious talks” with Washington and signaled a detente with OPEC members to ease concerns of supply disruptions.
Brent crude oil futures fell $3.63, or 5.2%, to $65.69 per barrel as of 9:20 a.m. Japan time. U.S. West Texas Intermediate crude oil fell $3.60, or 5.5%, to $61.61 per barrel.
Brent and WTI fell after posting their biggest monthly gains since 2022 in January as the risk of a military attack on Iran receded following President Trump’s comments over the weekend. In January, Brent rose 16% and WTI rose 13%.
UBS analyst Giovanni Staunovo said a lack of further escalation in tensions in the Middle East, as well as lower supply disruptions in the United States and Kazakhstan, weighed on oil prices. On Saturday, President Trump told reporters that Iran was “in serious talks”, hours after Tehran’s top security official, Ali Larijani, said preparations for negotiations were underway.
President Trump has repeatedly threatened to intervene if Iran fails to agree to the nuclear deal or continues to kill protesters. Philip Nova analyst Priyanka Sachdeva said persistent threats supported oil prices throughout January. The downturn was also caused by a decline in broader commodity markets due to significant declines in gold and silver, which analysts believe is partially responsible for the dollar’s strength.
“The recent pullback has also been reinforced by renewed strength in the US dollar, which typically makes dollar-denominated oil more expensive for non-US buyers, further weighing on prices,” Sachdeva said.
Concerns about global oil supply outpacing demand were also brought back into focus amid tensions in the Middle East, analysts said. At a meeting on Sunday, OPEC+ agreed to keep oil output unchanged for March. In November, the group froze further growth plans from January to March 2026, citing seasonal consumption weakness.
“Geopolitical risks mask a fundamentally bearish oil market,” Capital Economics said in a Jan. 30 report.
“The historic example of last year’s 12-day war (between Israel and Iran) and a well-supplied oil market will still keep Brent oil prices depressed until the end of 2026.”
(Reporting by Enes Tunagur in London; Additional reporting by Katya Golubkova in Tokyo and Sudarshan Varadhan in Singapore; Editing by Chris Reese, Thomas Derpinghaus and Clarence Fernandez)
