Oil prices fell sharply on Monday, weighed down by escalating concerns that the ongoing U.S.-China trade war could erode global economic growth and suppress oil demand. Brent crude futures settled at $65.86 per barrel, down $1.01, or 1.51%, while U.S. West Texas Intermediate (WTI) crude ended the session at $62.05 per barrel, down 97 cents, or 1.545%. This decline followed Brent’s modest gains over the previous two sessions, though it still closed last week with a loss of over 1%.
Investor sentiment has increasingly been dominated by trade tensions rather than geopolitical developments, such as U.S.-Iran nuclear negotiations or internal divisions within the OPEC+ alliance. Analysts noted that uncertainty surrounding the pace and outcome of U.S.-China negotiations is undermining market confidence, with mixed messages from both Washington and Beijing leaving traders wary. Despite President Trump’s assertions that talks were progressing, U.S. Treasury Secretary Scott Bessent and Chinese officials indicated that no active negotiations were underway.
Oil market participants are also closely watching the upcoming OPEC+ meeting on May 5, where several members are expected to push for an accelerated increase in production for a second consecutive month. Analysts at BNP Paribas downgraded their sentiment, citing risks tied to OPEC+ cohesion and projecting Brent prices to remain in the high $60s during the second quarter.
Meanwhile, negotiations between the U.S. and Iran over Tehran’s nuclear program are continuing, though Iranian Foreign Minister Abbas Araqchi voiced caution about the prospects for success. In a separate development, a deadly explosion at Iran’s major port of Bandar Abbas killed at least 40 people and injured over 1,200, further complicating the regional backdrop.
With a volatile mix of trade uncertainty, potential oversupply from OPEC+, and geopolitical risks, oil markets remain under pressure, and sentiment is likely to remain fragile over the coming sessions.