Oil prices declined over 2% on Monday amid signs of progress in nuclear talks between the United States and Iran and concerns over global economic conditions linked to tariffs.
Brent crude fell $1.54, or 2.3%, to $66.42 a barrel by 1230 GMT, while U.S. West Texas Intermediate dropped $1.58, or 2.4%, to $63.10 a barrel.
The decline follows a previous surge in prices on Thursday, which marked the last trading session of the week due to the Good Friday holiday. The ongoing negotiations between the U.S. and Iran have reportedly moved forward, with both sides agreeing to draft a framework for a potential nuclear agreement.
This raised the prospect of increased Iranian crude supply returning to global markets.
The development came after the U.S. imposed additional sanctions on a Chinese oil refinery accused of processing Iranian crude, intensifying pressure on Tehran.
Meanwhile, market activity remained subdued due to the Easter holiday, contributing to volatility. Oil prices were also influenced by broader economic uncertainty stemming from global tariff policies, which are expected to weigh on demand for fuel.
Supply dynamics are also shifting, with the OPEC+ alliance scheduled to increase output by 411,000 barrels per day starting in May. However, the overall supply increase may be moderated by production cuts from member countries currently exceeding their quotas.
In the U.S., economic data releases scheduled for this week are expected to provide further insight into the impact of tariffs on the manufacturing and services sectors. The U.S. remains the largest oil consumer globally, making domestic economic conditions a key factor in global demand forecasts.
