Trump comments on Iran talks send oil lower

Brent futures fell $3.63, or 5.2%, to $65.69 a barrel, while U.S. West Texas Intermediate dropped $3.60, or 5.5%, to $61.61. The move followed a strong January run in which Brent rose about 16% and WTI gained roughly 13% as markets priced higher regional risk and the possibility of supply disruption.

The selloff came as attention shifted from threats of escalation to the prospect of talks. Reuters reported that Trump’s remarks suggested a de-escalation in tensions and reduced fears that oil flows could be constrained by a broader confrontation. With crude priced on the margin, even incremental changes in perceived disruption risk can move benchmarks quickly, particularly after a month when positioning and headline risk had pulled prices higher.

Other supply-side pressures also eased. Reuters said fewer disruptions in the United States and Kazakhstan contributed to the decline, reducing the need for traders to maintain a disruption hedge at the front of the curve. When physical supply concerns soften at the same time as geopolitical risk cools, the market tends to reprice fast because the premium is concentrated in near-dated contracts.

Macro factors added to the pressure. Reuters pointed to a broader commodities selloff, especially in gold and silver, alongside a stronger U.S. dollar. A firmer dollar typically weighs on dollar-denominated commodities by making them more expensive for non-U.S. buyers, and cross-commodity deleveraging can spill into energy when funds reduce exposure across the complex.

Pullback also revived oversupply concerns. Reuters noted that worries about a well-supplied market resurfaced after OPEC+ decided to maintain current output levels through March. In that setup, prices can become more sensitive to demand signals and risk sentiment because the market lacks an immediate catalyst for a tighter balance.

Analysts at Capital Economics told Reuters they still see the market as well supplied and suggested that, even after last month’s geopolitically driven gains, Brent could drift lower by the end of 2026 if fundamentals dominate. For now, Monday’s action reflected a repricing of headline risk: traders marked down the probability of a near-term disruption scenario and re-centered the market on supply continuity, dollar strength and the balance implied by OPEC+ policy.