Oil benchmarks moved lower on Monday in Asian trade, with traders citing reports that the United States and Iran were holding talks as a key factor removing a portion of the risk premium that had supported recent gains. Market participants also took profits after last week’s advance, while a rebound in the U.S. dollar added downward pressure on crude.
Price move and timing
Brent futures for April delivery fell 3.3% to $67.07 a barrel by 20:31 ET (01:31 GMT). The decline followed a period in which prices had climbed to near six-month highs amid concerns about potential U.S. military action against Iran and supply disruptions from extreme cold in North America.
Drivers behind the earlier rally
Markets had pushed crude higher as participants priced in greater geopolitical risk. That move was reinforced by cold-weather disruption in parts of North America, and by a major production outage in Kazakhstan that provided additional support to oil markets.
Those factors helped oil overcome worries about weak global demand and the potential for a supply surplus in 2026, at least temporarily. However, the appearance of possible diplomatic engagement between Washington and Tehran trimmed some of the premium investors had built into prices.
U.S.-Iran developments and market reaction
U.S. President Donald Trump said over the weekend that Iran was "seriously talking" with his administration, comments that followed Iranian officials saying they were arranging negotiations with the United States. Those remarks came against a backdrop in which the president had repeatedly warned Iran about possible military action related to a nuclear deal and domestic protests, and had previously deployed a naval fleet to the Middle East.
Such deployments and threats had heightened market concerns about fresh U.S. strikes on Iran and the potential for further instability in the Middle East that could disrupt oil production. With signs of talks, some of that geopolitical premium eased.
Currency and policy influences
Traders also cited a stronger U.S. dollar as a headwind for crude. The greenback recovered from recent four-year lows after President Trump nominated Kevin Warsh as the next Chairman of the Federal Reserve, a move that was connected in market commentary to the dollar’s rebound and the resulting pressure on commodity prices.
OPEC+ decision and supply context
The OPEC+ group left its production plan for March unchanged at a meeting over the weekend, a move that was widely expected. The cartel reiterated the decision to pause further output increases, maintaining a halt it had announced in November after raising production by about 2.9 million barrels per day through 2025.
Oil has fallen roughly 20% over the past year, and OPEC+ provided no forward guidance on production, a stance the group said reflected uncertainty about the global economy and geopolitical conditions.
Market participants noted that the combination of diplomatic signals, profit-taking, currency strength, and a steady OPEC+ output stance drove the downward move in oil prices on Monday.