Oil Slides as U.S.–Iran Talks Ease Conflict Fears, Tariff Hikes Cloud Demand Outlook

Oil prices fell about 1% on Monday as investors weighed easing geopolitical tensions ahead of renewed U.S.–Iran nuclear talks against fresh uncertainty over global growth following new U.S. tariff measures.

Brent crude futures declined 87 cents, or 1.21%, to $70.89 a barrel by 07:22 GMT, while U.S. West Texas Intermediate (WTI) crude fell 85 cents, or 1.28%, to $65.63 a barrel.

Market sentiment was pressured after President Donald Trump said on Saturday that the United States would raise a temporary tariff on imports from all countries to 15%, up from 10%, the maximum allowed under the relevant statute. The move came after the U.S. Supreme Court struck down his previous tariff program. Adding to near-term uncertainty, U.S. Customs and Border Protection said it would halt the collection of tariffs imposed under the International Emergency Economic Powers Act at 12:01 a.m. EST (05:01 GMT) on Tuesday.

The renewed trade uncertainty offset last week’s strong gains in oil prices, when Brent and WTI rose more than 5% amid fears of a potential military confrontation between the United States and Iran.

Those concerns have since eased as Washington and Tehran prepare for a third round of nuclear negotiations, scheduled to take place on Thursday in Geneva, according to Oman’s Foreign Minister Badr Albusaidi. Iran has signaled a willingness to make concessions on its nuclear program in exchange for sanctions relief and international recognition of its right to enrich uranium, a senior Iranian official told Reuters.

Looking further ahead, Goldman Sachs said the global oil market is likely to remain in surplus in 2026, assuming no major disruption to Iranian supply. The bank raised its fourth-quarter 2026 price forecasts for Brent and WTI by $6 to $60 and $56 a barrel, respectively, citing lower oil inventories across OECD countries.

However, Goldman Sachs also cautioned that potential sanctions relief for Iran and Russia could accelerate stock builds and unlock additional supply over the longer term. Such a scenario could pose downside risks of roughly $5 for Brent and $8 for WTI to fourth-quarter 2026 prices, underscoring lingering uncertainty in the medium-term oil outlook.