WTI crude oil futures dropped over 4% to below $63 per barrel on Monday, retreating from multi-month highs as traders monitor developments in US-Iran negotiations that could reduce risk premiums. President Trump said on Saturday that Iran was “seriously talking” with the US, shortly after Iran indicated that arrangements for talks were progressing.
This marked a shift from last month’s heightened tensions, when Trump repeatedly threatened military action over Iran’s crackdown on nationwide protests, while Tehran also warned of retaliation. Those exchanges had helped drive oil prices sharply higher in January on fears of supply disruptions in the region. Adding to signs of de-escalation, reports suggested that Iran’s Revolutionary Guards’ naval forces have no plans to conduct live-fire exercises in the Strait of Hormuz, a vital global oil route. Meanwhile, OPEC+ on Sunday reaffirmed its earlier decision to keep output unchanged in March, the last part of its three-month supply freeze.
