Oil Prices Fall 4% as US-Iran Tensions Ease

Global oil prices dropped sharply on Monday after signals of easing tensions between the United States and Iran reduced fears of supply disruptions from the Middle East. The decline followed comments by US President Donald Trump suggesting that Iran was “seriously talking” with Washington, raising hopes of diplomatic engagement with the key OPEC producer.

Brent crude futures fell 4.1% to $66.51 per barrel, while US West Texas Intermediate (WTI) crude slipped 4.1% to $62.51 per barrel in early Asian trading. The losses reversed gains from the previous session, when Brent touched a six-month high and WTI traded near its strongest level since late September amid escalating geopolitical tensions.

Market analysts said oil prices had risen throughout January on fears of a potential military confrontation involving Iran. However, sentiment shifted after reports confirmed that Iran’s leadership had begun arrangements for negotiations and that its naval forces would not conduct live-fire drills in the Strait of Hormuz.

A stronger US dollar also added pressure on crude prices, making oil more expensive for non-US buyers. Meanwhile, OPEC+ maintained its decision to keep output unchanged for March, reinforcing expectations of ample global supply.

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Analysts warn that while geopolitical risks remain, underlying oil market fundamentals continue to point toward a softer price outlook.