Oil prices experienced a decline of nearly 5% on Monday, poised for the most significant single-session drop in over six months, following remarks from U.S. President Donald Trump indicating that Iran was “seriously talking” with Washington, which suggests a potential de-escalation with an OPEC member. Brent crude futures experienced a decline of $3.30, representing a 4.8% decrease, settling at $66.02 per barrel as of 0528. U.S. West Texas Intermediate crude experienced a decline of $3.23, representing a decrease of nearly 5%, settling at $61.98 per barrel. Both contracts are experiencing a significant decline from multi-month peaks, as the likelihood of a military strike diminished following Trump’s remarks over the weekend.
He consistently issued warnings to Iran regarding intervention should it fail to reach a nuclear agreement or persist in its actions against protesters. The ongoing threats have supported oil prices during January, according to Priyanka Sachdeva, an analyst. The recent pullback has also been reinforced by renewed strength in the U.S. dollar, which typically makes dollar-denominated oil more expensive for non-U.S. buyers, further weighing on prices, Sachdeva stated.
On Saturday, Trump informed reporters that Iran was “seriously talking,” shortly after Tehran’s leading security official, Ali Larijani, indicated that preparations for negotiations were in progress. Trump’s comments, coupled with reports indicating that the naval forces of Iran’s Revolutionary Guards have no intentions of conducting live-fire exercises in the Strait of Hormuz, suggest a trend towards de-escalation, according to market analyst Tony Sycamore. The crude oil market is viewing this as a positive retreat from confrontation, which is reducing the geopolitical risk premium that had been factored into prices during last week’s rally and leading to a phase of profit-taking,” he said.
During a meeting on Sunday, OPEC+ reached a consensus to maintain its oil production levels for March. In November, the grouping decided to halt any additional planned increases for January through March 2026 due to a seasonal decline in consumption. According to a note dated January 30, geopolitical risks obscure an inherently bearish oil market. The historical example of last year’s 12-day conflict between Israel and Iran, coupled with a well-supplied oil market, is expected to exert downward pressure on Brent crude prices by the end of 2026.