(RTTNews) – Extending the losses from previous session, crude oil tumbled on Monday as signs of de-escalation of the U.S.-Iran conflict reduced supply-output concerns in the Middle East, taking off the geopolitical risk premium.
WTI Crude Oil for March delivery was last seen trading down by $3.28 (or 5.03%) at $61.93 per barrel.
Last month, U.S. President Donald Trump sent U.S. warships to the Middle East and served an ultimatum to Iran asking the nation to negotiate its nuclear plans with the U.S. or face severe attacks. Trump stated that the fleet was ready to fulfil its mission with violence if necessary.
However, refusing to budge under Trump’s coercive tactics, Iran warned of severe counterattacks. Iran even asked its neighbors not to facilitate U.S. forces in their territories failing which they would be considered Iran’s adversaries.
The tension transformed to a war-like situation in the Middle East, raising supply-output disruption concerns and pushing up oil prices.
Iran’s Supreme Leader Ayatollah Ali Khamenei warned that an attack on Iran could trigger a “regional war.”
Yesterday, Trump stated that Iran was engaged in serious talks with the U.S.
Today, Iran’s media reported that Iran’s President Masoud Pezeshkian has ordered commencing negotiations with the U.S. while a framework for negotiations is getting finalized through regional intermediaries.
With Middle East tension melting to some degree, oil prices declined today.
A strengthening U.S. dollar value also accelerated the decline in oil prices.
The U.S. Dollar Index was last seen trading at 97.63, up by 0.64 (or 0.66%).
According to a Reuters report, crude oil exports from Venezuela rose to 800,000 barrels per day in January from 498,000 bpd in December, adding pressure to the oil prices.
A fresh round of talks on the U.S.-scripted peace plan to end the Russia-Ukraine war is set to begin this week.
A previous meeting that was held last month between Russia and Ukraine with U.S. mediators in Abu Dhabi ended without any significant breakthrough.
Now, both Russia and Ukraine have announced that the trilateral talks are resuming likely in Abu Dhabi by February 4 and 5.
Though Russia stated it is halting its attacks on Ukraine at Trump’s request until yesterday. However, Ukraine reported that the southeastern Dnipropetrovsk region suffered two separate drone strikes on Ukraine’s civilian sites.
Russian officials reported that two separate Ukrainian drones hit its Belgorod border region and the Bryansk region.
OPEC announced today that OPEC members – Iran and the United Arab Emirates as well as the non-OPEC producers Kazakhstan and Oman – have furnished their updated plans to cut excess output between January and June to compensate their previous surplus production.
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