Oil prices fell sharply in Asian trade on Monday after reports of talks between the U.S. and Iran drove some risk premium out of crude prices, with traders also locking in recent profits.

Prices fell after the Organization of Petroleum Exporting Countries and allies (OPEC+) left production unchanged during a weekend meeting, as broadly expected.

Brent oil futures for April delivery tumbled 3.3% to $67.07 a barrel by 20:31 ET (01:31 GMT).

Oil prices had risen 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.

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.

Trump says Iran ‘seriously talking’ with Washington
U.S. President Donald Trump said over the weekend that Iran was “seriously talking” to his administration, a move that could herald a potential de-escalation between the two countries.

Trump’s comments 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.

Geopolitical tensions, coupled with recent weather-related disruptions in the U.S., 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.

OPEC+ leaves production unchanged
The OPEC+ on Sunday left its oil production for March unchanged, reaffirming the cartel’s decision to stop further output hikes despite a recent increase in oil prices.

The cartel– which had hiked production by about 2.9 million barrels per day through 2025, but had announced an indefinite pause on any further hikes in November. Oil prices slid some 20% through the past year.

The OPEC+ did not provide any forward guidance on production, likely due to heightened uncertainty over the global economy and geopolitical issues.
Source: ING