Oil prices declined by around 1% on Monday, after hitting a six-month high last week, amid signs that the US-Iran tensions are unlikely to worsen. Concerns around global growth and lower fuel demand following the tariff hike announcements by US President Donald Trump also weighed on crude.
Brent crude futures fell by 76 cents, or 1.06%, to $71 per barrel as of 0354 GMT, while US West Texas Intermediate (WTI) crude futures dropped 75 cents, or 1.10%, to $65.75 per barrel.
Back home, crude oil prices on Multi Commodity Exchange (MCX) were also marginally down by 0.30% at ₹6,039.
What’s driving crude oil prices lower?
Iran and the US are set to hold a third round of nuclear negotiations in Geneva on Thursday, Badr Albusaidi, Oman’s foreign minister, said on Sunday, easing concerns about a potential escalation in tensions.
According to a reuters report, Tehran is willing to consider concessions on its nuclear program in exchange for sanctions relief and formal recognition of its right to enrich uranium.
Meanwhile, on Saturday, Trump said he would increase a temporary tariff on US imports from all countries to 15% from 10% — the highest level permitted under the law — after the US Supreme Court invalidated his earlier tariff program.
Earlier today, China stated that it is conducting a “comprehensive assessment” of the US court’s tariff ruling and urged Washington to withdraw the “relevant unilateral tariff measures” imposed on its trading partners, according to reuters.
The latest round of tariff-related announcements has again created uncertainty over global economic growth and fuel demand.
Crude oil prices outlook
Amid the current backdrop, domestic brokerage firm JM Financial expects oil prices to remain subdued till the November 2026 mid-term elections in the US, as Saudi Arabia-led OPEC+ output hikes seem to be primarily aimed at meeting the US President’s near-term request for lower oil prices.
“We believe Brent may remain subdued ~USD 65/bbl till the Nov’26 mid-term elections in the US as Saudi Arabia is obliging the US President’s near-term request for low oil prices, but it is likely to stabilize ~USD 70/bbl in the medium term as otherwise it could hurt US shale capex and lead to a jump in Saudi Arabia’s fiscal deficit,” the firm said.
Meanwhile, Kaynat Chainwala, AVP – Commodity Research, Kotak Securities, believes that crudeoil prices may remain range-bound ahead of a third round of US–Iran nuclear talks in Geneva on Thursday, with tariff uncertainty also tempering sentiment.
“Brent crude and West Texas Intermediate prompt spreads have tightened to below 50 cents and 20 cents, respectively, down from over 80 and 50 cents late last month, signaling easing short-term supply tightness, even as the market remains in backwardation,” Chainwala said.
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