Oil prices declined in Asian trade on Monday as the United States and Iran prepared for a third round of nuclear negotiations, easing immediate fears of military escalation.
At the same time, renewed tariff hikes from U.S. President Donald Trump added uncertainty to the outlook for global growth and fuel demand.
By 2:30 pm AEDT (3:30 am GMT), Brent crude futures were down 65 cents, or 0.9%, at US$71.11 per barrel. U.S. West Texas Intermediate crude futures fell 63 cents, or 1%, to US$65.85 per barrel.
Trump said on Saturday he would lift a temporary tariff on U.S. imports from all countries to 15% from 10%, the maximum level permitted under the law, after the U.S. Supreme Court struck down his earlier tariff programme.
The tariff move tempered escalating concerns over a potential U.S.–Iran conflict, which had driven Brent and WTI prices up more than 5.9% and 5.7%, respectively, last week.
Iran and the U.S. are scheduled to hold a third round of nuclear talks on Thursday in Geneva, Oman’s Foreign Minister Badr Albusaidi said on Sunday.
ANZ analysts wrote in a client note: "A potential war would jeopardise flows from a region that pumps about a third of the world’s supplies… This has seen the market build in a relatively large geopolitical risk premium in current oil prices."
Iran has signalled it is willing to make concessions on its nuclear programme in exchange for sanctions relief and recognition of its right to enrich uranium, a senior Iranian official told Reuters.
