Brent crude oil futures dropped more than 5% on Monday, slipping below $66 a barrel as investors reacted to developments suggesting reduced geopolitical risk in the Middle East, while also considering OPEC+’s decision to maintain output levels.
The decline followed a period of sharp gains earlier in January, when heightened tensions between the United States and Iran had pushed prices to multi-month highs.
Reports over the weekend indicated progress in U.S.-Iran negotiations, with both sides signaling that discussions were advancing. This marked a shift from the previous month, when escalating confrontations, threats of military action, and warnings of retaliation had fueled market fears of supply disruptions.
Additional reassurance came as Iran’s Revolutionary Guards’ naval forces reportedly have no plans to conduct live-fire exercises in the Strait of Hormuz, a vital global oil shipping route.
OPEC+ on Sunday reaffirmed its earlier decision to keep production unchanged in March, the final month of its three-month supply freeze.
Analysts said the combination of easing geopolitical concerns and continued production discipline created a volatile environment, prompting traders to unwind positions and take profits following the earlier rally.
Brent’s movements continue to be closely monitored as investors weigh potential supply disruptions, regional tensions, and broader demand trends amid an uncertain market environment.
