Oil Prices Drop Amid US-Iran De-escalation Talks: What It Means for Investors and Businesses in Oman
LONDON – Oil prices declined for a second consecutive session on Tuesday as markets considered the potential easing of US-Iran tensions, alongside pressure from a stronger US dollar.
By 10:16 GMT, Brent crude futures dropped 15 cents to $66.15 per barrel, while US West Texas Intermediate (WTI) crude decreased by 8 cents to $62.06 per barrel. Earlier in the session, both Brent and WTI touched their lowest levels in a week, reaching $65.19 and $61.12 per barrel, respectively.
The oil market saw a steep decline of over 4% on Monday following remarks from US President Donald Trump, who indicated that Iran was “seriously talking” with Washington, suggesting a possible reduction in tensions with the OPEC member.
Iran and the United States are scheduled to resume nuclear negotiations on Friday in Türkiye, according to officials from both countries. President Trump cautioned that with substantial US naval forces heading toward Iran, “bad things could happen” if an agreement is not reached.
Iranian President Masoud Pezeshkian emphasized that talks with the US should continue to protect Iran’s national interests, provided that “threats and unreasonable expectations” are avoided.
Kelvin Wong, Senior Market Analyst at OANDA, commented, “The volatile price action seen over the past four weeks has been driven by geopolitical risk premiums linked to the current US administration’s expansionary foreign policy, especially the ‘on-off’ threats towards Iran.”
Further compounding the downward pressure, the US dollar index hovered near its highest point in over a week, rendering dollar-denominated crude more expensive for buyers using other currencies.
Investors also reviewed global supply dynamics. Russian Deputy Prime Minister Alexander Novak stated that Russia’s fuel volumes are sufficient, with a surplus currently available, and noted that the domestic oil products market stabilized last autumn.
On Monday, President Trump announced a trade agreement with India that reduces US tariffs on Indian goods from 50% to 18% in return for New Delhi halting Russian oil purchases and lowering trade barriers.
“If this happens, it could lead to an increase in the amount of Russian oil floating at sea,” ING analysts noted in a report.
Trump added that India had agreed to purchase oil from the United States and potentially Venezuela.
Looking ahead, analysts anticipate continued price volatility. Priyanka Sachdeva, Senior Market Analyst at Phillip Nova, said, “Prices are likely to stay choppy and range-bound, reacting to headlines and macroeconomic cues rather than forming a decisive trend, with risks skewed to the downside.”
— Reuters
Special Analysis by Omanet | Navigate Oman’s Market
The recent easing of US-Iran tensions and a stronger US dollar have pushed oil prices down, indicating potential volatility and downward pressure on Oman’s oil revenue in the near term. Businesses in Oman should brace for price fluctuations and consider diversifying investments beyond oil, while smart investors might explore opportunities in sectors less exposed to geopolitical risks or capitalize on strategic partnerships that could emerge from shifting global trade dynamics.
