(Investing) – Oil prices fell sharply Monday as geopolitical tensions between the U.S. and Iran eased, prompting traders to lock in profits after a recent jump in prices.
At 08:20 ET (13:20 GMT), for April tumbled 5.1% to $65.82 a barrel and U.S. West Texas Intermediate crude fell 5.2% to $61.76 per barrel.
Oil prices rose to near six-month highs last week on concerns over more U.S. military action against Iran, while extreme cold weather in North America was also seen disrupting supplies.
The two benchmark contracts posted their biggest monthly increase since 2022 in January.
Trump says Iran ‘seriously talking’ with Washington
U.S. President Donald Trump said over the weekend that Iran was “seriously talking” to his administration, comments that came shortly after Iranian officials said they were arranging for negotiations with the United States.
Trump had repeatedly threatened Iran with military action over a nuclear deal and ongoing protests in the country. He had also deployed a naval fleet to the Middle East.
This act ramped up concerns over fresh U.S. strikes against Iran, which could spur more geopolitical instability in the Middle East and disrupt oil production in the region. Crude prices had risen sharply as markets priced in a greater risk premium.
“The selloff follows reports of fresh U.S.-Iran negotiations, raising the possibility of a deal and easing geopolitical risk premium. A broader correction across financial markets has added to the downward momentum,” said analysts at ING, in a note.
Recent weather-related disruptions in the U.S. also helped oil rise past concerns over weak global demand and a potential supply glut in 2026.
More recently, a major production outage in Kazakhstan also helped underpin oil prices.
But they faced some profit-taking on Monday. A rebound in the dollar, from recent four-year lows, also pressured crude prices, as the greenback surged after U.S. President Donald Trump nominated Kevin Warsh as the next chairman of the Federal Reserve.
OPEC+ leaves production unchanged
The Organization of Petroleum Exporting Countries and allies, known as OPEC+, left its oil production for March unchanged on Sunday, reaffirming the cartel’s decision to stop further output hikes despite a recent increase in oil prices.
The group – had hiked production by about 2.9 million barrels per day through 2025, but announced an indefinite pause on any further hikes in November.
OPEC+ did not provide any forward guidance on production, likely due to heightened uncertainty over the global economy and geopolitical issues.
Net long positions rose last week
Speculative positioning showed that recent geopolitical tensions had encouraged fresh buying ahead of today’s declines.
“Money managers increased net longs in ICE Brent by 29,947 lots last week – the largest bullish stance since September 2025,” said ING. “NYMEX WTI net longs also rose for an eighth straight week, up 9,557 lots to the strongest level since August 2025, supported partly by extreme cold weather that disrupted refinery operations along the US Gulf Coast.”
Ambar Warrick contributed to this article
