02.02.202602:06:33UTC+00Oil Falls Over 3%, US-Iran Talks in Focus

On Monday, West Texas Intermediate (WTI) crude oil futures experienced a decline of over 3%, dropping to approximately $63 per barrel. This downturn follows a recent peak over several months and comes as market participants keep a close eye on the evolving negotiations between the United States and Iran, which have the potential to alleviate risk premiums. President Trump recently mentioned that Iran is "seriously talking" with the US, a statement made following Iran's indication that progress is being made towards discussions. This represents a departure from the heightened tensions observed last month, when Trump issued multiple threats of military intervention in response to Iran's suppression of domestic protests, and Iran promised retaliation. Such exchanges had previously contributed to a sharp increase in oil prices in January due to fears of possible disruptions in regional supply. In a sign of easing tensions, reports surfaced suggesting that Iran’s Revolutionary Guards' naval forces have no intention of conducting live-fire drills in the Strait of Hormuz, a crucial corridor for global oil transportation. Additionally, OPEC+ reaffirmed on Sunday its prior resolution to maintain production levels in March, consistent with the final segment of its three-month supply freeze strategy.