Oil prices fall as markets watch US-Iran talks

Oil prices fell by more than two dollars on Monday as investors awaited clearer signals from negotiations between the United States and Iran, while keeping an eye on supply developments affected by the war in the Middle East.

Brent crude weakened to around 107 dollars a barrel, while US WTI fell below 110 dollars. The decline follows a sharp rise last week, when prices jumped by 8 to 11 per cent – the biggest increase since 2020.

Tensions persist mainly because of the situation in the Strait of Hormuz, which remains partially closed after Iran’s attacks on shipping. Although the US and Iran have discussed a framework for a possible ceasefire, Tehran is refusing to reopen the strait immediately.

Supply constraints are forcing refiners to look for alternative sources of oil, with competition growing between Europe and Asia. However, some tankers are still passing through the strait, especially from countries Iran considers friendly.

The situation is further complicated by the ongoing conflict and the limited ability of OPEC+ countries to increase production, leaving markets volatile and vulnerable to further developments.

(reuters, max)