Oil prices fell on Monday amid renewed optimism a US-Iran nuclear deal, a brief Easter ceasefire between Russia and Ukraine, and worries about rising US-China trade tensions.
International benchmark Brent crude fell by around 1.2%, trading at $66.13 per barrel at 10.32 a.m. local time (0732 GMT), down from $66.96 at the previous session’s close.
US benchmark West Texas Intermediate decreased by about 1.3%, settling at $62.88 per barrel, compared to its prior session close of $63.71.
Both benchmarks decreased after progress in Iran’s nuclear talks, a truce between Moscow and Kyiv as well as concerns over the US-China trade war.
The US and Iran ‘made very good progress’ in direct and indirect discussions, a US official said Saturday. ‘We agreed to meet again next week and are grateful to our Omani partners for facilitating these talks and to our Italian partners for hosting us today,’ the official said in a statement.
Iranian Foreign Minister Abbas Araghchi described the talks as ‘constructive and good.’ Before the next round, Araghchi said there would be expert-level technical discussions between the two sides in Oman starting this Wednesday.
The indirect nuclear talks, which began last Saturday in Muscat, have been focused on Iran’s nuclear program, with the two sides communicating through Oman as an intermediary.
US President Donald Trump has threatened military action against Iran if a new agreement is not reached to replace the 2015 nuclear deal brokered under the Obama administration.
A potential US-Iran nuclear deal boosted prospects for Iranian oil returning to global markets and reduced geopolitical tensions, easing the risk premium and helping lower oil prices.
Meanwhile, the Kremlin announced on Sunday that Russian President Vladimir Putin has not ordered the extension of an Easter ceasefire in Ukraine.
On Saturday, Putin declared a 30-hour unilateral ceasefire in the ongoing war in Ukraine, arguing that its success or failure would show Kyiv’s readiness to seek a peaceful resolution to the conflict.
In response, Ukrainian President Volodymyr Zelenskyy said his country would mirror Russia’s actions, adding that Kyiv proposes extending the pause ‘if a complete ceasefire truly takes hold.’
On Sunday, Moscow and Kyiv accused each other of violating a unilateral Easter ceasefire declared by Russian President Vladimir Putin a day earlier.
Meanwhile, analysts highlighted progress in US trade talks with countries other than China, cautioning that an intensifying Washington-Beijing trade war could hamper US efforts to combat inflation and maintain economic growth.
China’s Commerce Ministry said in a statement on Monday that it respects efforts by all parties to resolve economic and trade differences with the US through equal consultations but firmly opposes any agreement made at China’s expense.
Experts warn that geopolitical tensions between the US and China, potentially involving other countries, could put pressure on global trade and reignite inflationary risks.
Analysts note that if inflation picks up, the Federal Reserve could delay interest rate cuts, potentially weakening demand in the US, the world’s largest oil consumer, and pushing oil prices lower.
