Oil prices slid more than $3 per barrel on Monday after U.S. President Donald Trump said Iran was “seriously talking” with Washington, signaling a potential de-escalation in tensions that had driven a hefty geopolitical premium into crude markets. Brent crude fell $3.02, or 4.4%, to settle at $66.30 a barrel, while U.S. West Texas Intermediate dropped $3.07, or 4.7%, to $62.14.
The selloff gathered pace after officials from both countries confirmed that Iran and the United States will resume nuclear talks on Friday. Trump’s comments over the weekend followed statements from Iran’s top security official indicating negotiations were being arranged, easing fears of imminent confrontation. Those concerns had underpinned prices through much of January, as Trump repeatedly warned of intervention if Iran failed to agree to a nuclear deal or continued its crackdown on protesters.
Additional pressure came from currency and weather developments. The U.S. dollar strengthened after Trump nominated Kevin Warsh as the next Federal Reserve chair, making dollar-denominated oil more expensive for buyers using other currencies. At the same time, forecasts for milder U.S. weather weighed on energy markets, with diesel futures — heavily used for heating and power generation — falling more than 6%.
Analysts noted that Middle East tensions combined with a U.S. polar vortex had helped push WTI up 14% and Brent up 16% in January, but as those factors fade, attention is shifting back toward a likely buildup in global oil inventories later this year. Reinforcing that outlook, OPEC+ agreed on Sunday to keep production unchanged for March, maintaining its earlier decision to freeze planned output increases through early 2026 due to seasonally weaker demand.