Oil fell for the first time in three days after Iran confirmed it would hold negotiations with the US, easing the immediate risk of military conflict and supply disruptions from the OPEC producer.
West Texas Intermediate dropped to settle near $63 a barrel, after adding 4.8% over the previous two sessions, while Brent was below $68 a barrel. Iranian Foreign Minister Abbas Araghchi confirmed in a social media post that the talks will be held in Oman on Friday, clarifying the location of the encounter.
Futures also extended declines after private jobs data revived worries about an economic slowdown in the US and a potential slowdown in oil demand.
The commodity pared some losses after Saudi Arabia dropped the price of its main oil grade for buyers in Asia to the lowest in years, though by less than many in the industry had anticipated. That is offering the market a sign that the kingdom has faith in demand for its barrels.
Differing positions over the parameters of US-Iran negotiations mean it remains unclear whether the two sides can realistically bridge major differences at a time of heightened tensions in the region, which supplies about a third of the world’s crude. That has reinserted some risk premium into oil prices, which have rebounded this year after slumping in the second half of 2025 on signs of a growing global glut.
“We see that there is indeed a bit of oversupply at the moment, but that I would say is balanced with the significant uncertainty that we are seeing because of the geopolitical challenges,” Wael Sawan, chief executive officer of Shell Plc, said in a Bloomberg TV interview. “There is a premium with that uncertainty and volatility.”
The added volatility is bolstering market gauges aside from benchmark futures prices. Bullish WTI call options settled at their biggest premium to bearish bets, or put options, since 2022, a sign of how traders are protecting against price spikes. A major exchange-traded product also saw its biggest inflow since 2020 earlier this week.
Traders are also closely following Ukraine peace talks this week, which Ukrainian President Volodymyr Zelenskiy said will be impacted by major oil producer Russia’s attacks on his country’s energy infrastructure. He asked his US counterpart, Donald Trump, for more weapons to force Moscow to end the war.
Meanwhile, the US and Russia have agreed to restart high-level military contacts that had been suspended shortly after the invasion of Ukraine.
Oil is also under pressure amid a broad selloff in precious metals. Silver tumbled more than 18%, erasing a two-day recovery, while gold fell as much as 3.5% in choppy trading. While risky assets like oil typically move opposite to safe-haven assets, rising flows into cross-commodity baskets have led them to trade more in tandem in recent times.
Oil Prices
WTI for March delivery declined 2.8% to settle at $63.29 a barrel in New York
Brent for April settlement fell 2.8% to settle at $67.55 a barrel
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