Oil prices came under heavy pressure in Asian trading on Monday, sliding more than 3% as reports of renewed contacts between the United States and Iran prompted traders to unwind part of the geopolitical risk premium embedded in crude. The move was compounded by profit-taking after last week’s rally.
The decline followed a weekend meeting of the Organization of Petroleum Exporting Countries and its allies (OPEC+), which concluded with the group leaving production levels unchanged, in line with market expectations.
Brent crude futures for April delivery fell 3.3% to $67.07 a barrel by 20:31 ET (01:31 GMT).
Crude prices had climbed to near six-month highs last week amid fears of escalating U.S. military action against Iran, while extreme cold weather in parts of North America was also seen disrupting supply. On Monday, however, those gains were partially reversed as investors moved to lock in profits.
Additional pressure came from a rebound in the U.S. dollar from recent four-year lows. The greenback strengthened after U.S. President Donald Trump nominated Kevin Warsh as the next chairman of the Federal Reserve, making dollar-denominated commodities such as oil more expensive for holders of other currencies.
Trump says Iran “seriously talking” with Washington
U.S. President Donald Trump said over the weekend that Iran was “seriously talking” to his administration, raising the prospect of a potential easing of tensions between the two countries.
His comments followed remarks from Iranian officials indicating that preparations were under way for negotiations with the United States.
Trump has repeatedly threatened Iran with military action over its nuclear programme and ongoing domestic protests, and had previously ordered the deployment of a naval fleet to the Middle East. Those moves had fuelled fears of fresh U.S. strikes on Iran, increasing concerns about geopolitical instability in the region and possible disruptions to oil supplies.
As a result, crude prices had surged as markets priced in a higher risk premium. Geopolitical tensions, combined with weather-related supply disruptions in the United States, had helped oil prices push past worries about weak global demand and the risk of a supply glut in 2026. More recently, a major production outage in Kazakhstan had also provided support to prices.
OPEC+ maintains output levels
OPEC+ confirmed on Sunday that it would keep oil production unchanged for March, reiterating its earlier decision to pause further output increases despite the recent rise in prices.
The group had raised production by around 2.9 million barrels per day through 2025, but announced an indefinite halt to additional increases in November. Oil prices have fallen by roughly 20% over the past year.
The cartel offered no forward guidance on future production policy, a move likely reflecting elevated uncertainty surrounding the global economic outlook and ongoing geopolitical risks.