Oil Prices Drops After Signs of U.S.-Iran de-escalation

Oil prices fell sharply on Monday after U.S. President Donald Trump said Iran was “seriously talking” with Washington. The comments signaled a possible de-escalation after tensions had pushed prices to multi-month highs. Investors reacted quickly, sending Brent and U.S. crude lower.

Brent crude futures dropped $2, or 2.9%, to $67.28 per barrel at 0100 GMT. U.S. West Texas Intermediate crude also fell $2, or 3.1%, to $63.17 per barrel. Both contracts declined from recent highs caused by fears of a military strike on Iran.

Trump had repeatedly threatened Iran with intervention over its nuclear program and treatment of protesters. On Saturday, he told reporters he hoped for a “negotiated deal that would be satisfactory with no nuclear weapons.” Hours earlier, Tehran’s top security official Ali Larijani said negotiations were underway.

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Analysts said Trump’s comments and reports that Iran’s Revolutionary Guards will not conduct live-fire exercises indicate easing tensions. IG Market analyst Tony Sycamore said the crude market sees this as a step back from confrontation. Profit-taking followed as geopolitical risks had factored heavily into last week’s rally.

Meanwhile, OPEC+ decided to keep its oil output unchanged for March at a meeting on Sunday. In November, they had frozen further increases from January to March 2026 due to seasonally weaker consumption. Capital Economics noted that a well-supplied market and historical conflicts, like last year’s Israel-Iran war, may still weigh on prices.