Oil prices slid more than 1% on Monday after easing geopolitical tensions reduced fears of supply disruptions, following signals from the United States and Iran that indirect talks over Tehran’s nuclear program would continue.
Brent crude and U.S. West Texas Intermediate both declined as traders reassessed the risk of a wider Middle East conflict, which had been propping up prices. The prospect of sustained diplomacy lowered concerns that sanctions or military escalation could disrupt oil flows from the region, a key supplier to global markets.
The talks are happening despite continued tough talk from Tehran, which has warned that U.S. bases in the region could be targeted if Iran is attacked. Still, market participants seemed to focus on the diplomatic track rather than the threats, seeing dialogue as a stabilizing factor for crude supply.
Adding to the cautious mood, the European Union has proposed a new package of measures aimed at tightening restrictions on services that support Russia’s oil exports. While the proposal highlights ongoing supply-side risks linked to the Ukraine war, its immediate impact was overshadowed by the easing Middle East concerns.
Analysts said oil markets remain highly sensitive to geopolitical developments, with prices likely to stay volatile in the near term as traders weigh diplomatic progress against lingering risks from sanctions, conflicts, and global demand uncertainty.
