NEW DELHI: Oil prices declined around 1% on Monday as Washington and Tehran geared up for a third round of nuclear negotiations, tempering fears of a widening conflict, while President Donald Trumpās latest tariff increase clouded the global economic and demand outlook.
Brent crude futures fell 76 cents, or 1.06%, to $71 a barrel by 0354 GMT. US West Texas Intermediate crude futures dropped 75 cents, or 1.10%, to $65.75 a barrel.
Over the weekend, Trump announced he would lift a temporary tariff on US imports from all countries to 15% from 10%, the highest level permitted under the law, after the US Supreme Court invalidated his earlier tariff scheme.
āThe tariff news over the weekend has resulted in some risk aversion flows this morning, which can be viewed in the price of gold and US equity futures and this is weighing on the crude oil price,ā IG Markets analyst Tony Sycamore said.
China said on Monday it is conducting a āfull assessmentā of the US Supreme Courtās tariff decision and urged Washington to scrap ārelevant unilateral tariff measuresā imposed on trading partners.
The trade development countered mounting concerns last week about a potential US-Iran military confrontation, which had driven Brent and WTI benchmarks up more than 5%.
Iran and the US are set to hold a third round of nuclear talks on Thursday in Geneva, Omanās Foreign Minister Badr Albusaidi said on Sunday.
A senior Iranian official told Reuters that Tehran is willing to offer concessions on its nuclear programme in exchange for sanctions relief and recognition of its right to enrich uranium.
āBrent has at least $10 per barrel Iran risk premium but as long as the threat of US strikes hangs over diplomatic efforts, with a constant looming reminder from the naval armada amassed by Washington in the Middle East, it is hard to see crude sliding substantially,ā said Vandana Hari, founder of oil market analysis provider Vanda Insights.
Goldman Sachs projected that the global oil market would remain in surplus in 2026, assuming no supply disruption linked to Iran, while raising its fourth-quarter 2026 price forecasts by $6 to $60 per barrel for Brent and $56 for WTI, citing reduced OECD inventories.
However, the bank cautioned that possible sanctions relief for Iran and Russia could speed up inventory builds and unlock additional supply over time, creating downside risks of $5 and $8, respectively, to its fourth-quarter 2026 price projections.
