Oil Falls to Three-Week Low as Iran Talks Resume and OPEC+ Agrees to Increase Output

Oil prices fell nearly 5% during Asian trading on Monday, reaching their lowest level in three weeks after President Trump said a planned strike on Iran had been called off and confirmed that negotiations would resume later the same day.

As of 20:46 ET (00:46 GMT):

1. Brent crude (October contract): $83.68 per barrel, down 4.8%
2. WTI crude: $80.50 per barrel, down 4.9%

Both benchmarks had already declined by more than 5% last week, although July still ended with gains of more than 20%, highlighting elevated volatility linked to geopolitical developments.

Trump said Iran and neighboring countries had requested additional time for negotiations, with discussions focused on reopening the Strait of Hormuz and addressing issues related to Iran's nuclear program. The latest developments follow heightened tensions last week after Iran-linked drone strikes targeted Saudi oil facilities and gas vessels near Egypt's Damietta port, briefly pushing Brent above $90 amid concerns over potential disruptions to regional energy supplies.

OPEC+ also agreed on Sunday to increase production by approximately 188,000 barrels per day beginning in September, completing the unwind of its 2023 voluntary production cuts. Unlike earlier production increases that were largely offset by supply disruptions in Iran, Russia, and Kazakhstan, the latest increase comes as geopolitical tensions appear to be easing, a combination that could influence oil market pricing in the near term.

With signs of easing geopolitical tensions alongside higher planned production, market participants are likely to monitor how crude prices respond around the $80 WTI level, although short-term price movements will continue to depend on geopolitical developments, supply conditions, and broader economic data.