Oil prices declined on Monday as investor concerns mounted over the impact of the U.S.-led trade war on global energy demand, while developments in nuclear negotiations between Washington and Tehran added further complexity to the market outlook.
Brent crude dropped by as much as 2%, falling below $67 a barrel, while West Texas Intermediate hovered near $64. The retreat comes ahead of economic data releases expected to shed light on the broader effects of President Donald Trump’s trade policies. A revised global outlook from the International Monetary Fund (IMF) could provide additional evidence of an economic slowdown.
On the geopolitical front, Iranian Foreign Minister Mohammad Javad Zarif indicated that his country had reached a “better understanding” with the United States on several core issues following more than three hours of discussions on Saturday. The nuclear talks are set to resume Wednesday in Oman, and any progress could influence the volume of Iranian crude on the market.
“Everything is flashing bearishness — from macro, to fundamentals, and to geopolitics,” said Gao Jian, analyst at Qisheng Futures Co. “Worries over an economic recession remain the core risk.”
Global markets reflected a broader sense of caution. A dollar index fell to its lowest level since January 2024, while U.S. stock-index futures retreated following Trump’s criticism of the Federal Reserve. The risk-off sentiment weighed heavily on commodities across the board.
Oil prices have suffered steep losses this month, briefly hitting a four-year low. The sell-off has been driven by fears that escalating tariffs between the U.S. and key trade partners such as China could erode global crude consumption. Compounding the pressure, the OPEC+ alliance recently agreed to ramp up production more quickly than anticipated, reviving market fears of a supply glut.
“Nuclear talks between the U.S. and Iran appear to be progressing relatively well, helping to ease a fairly big supply risk hanging over the oil market,” said Warren Patterson, head of commodities strategy at ING Groep NV in Singapore. “It’s early days still, but the fact that further talks are planned suggests we are at least heading in the right direction.”
Trading volumes were expected to remain thin on Monday due to Easter holidays observed in several countries. Meanwhile, contango—a market condition in which longer-dated futures trade at a premium to near-term contracts—re-emerged in parts of the oil futures curve, signaling growing bearish sentiment.
Elsewhere, geopolitical tensions continued in Eastern Europe. Ukrainian President Volodymyr Zelenskiy accused Russian forces of violating an Easter Sunday ceasefire announced by Russian President Vladimir Putin. In response, the U.S. has reportedly discussed with allies the possibility of easing sanctions on Russia, contingent upon the establishment of a lasting ceasefire.
The oil market remains at the intersection of economic uncertainty, geopolitical risk, and shifting supply dynamics, with traders closely monitoring both macroeconomic indicators and diplomatic developments in the days ahead.
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