Oil prices fell about 1% after a weekend jolt from U.S. trade policy revived worries about global growth and fuel demand, even as tensions between Washington and Tehran had pushed crude sharply higher the week before. In Asian trading, Brent futures dropped roughly 1.2% to about $70.89 a barrel, while U.S. West Texas Intermediate (WTI) fell around 1.3% to about $65.63.
The immediate catalyst was President Donald Trump’s announcement that he would raise a temporary, across-the-board U.S. import tariff from 10% to 15%, described as the maximum allowed under the relevant law. The tariff move followed a U.S. Supreme Court decision that struck down Trump’s prior tariff program, injecting fresh uncertainty into the outlook for trade flows, economic activity, and energy consumption. Markets read the news as broadly risk-off: analysts pointed to “risk aversion” showing up in assets like gold and U.S. equity futures, and said the same dynamic weighed on crude.
At the same time, oil’s decline was cushioned by ongoing geopolitical tensions with Iran. Crude had climbed more than 5% the previous week on fears of a potential U.S.–Iran military confrontation. But those fears eased somewhat as the U.S. and Iran prepared for a third round of nuclear talks, scheduled for Thursday in Geneva, according to Oman’s foreign minister. A senior Iranian official said that Tehran was prepared to make concessions on its nuclear program in exchange for sanctions relief and recognition of its right to enrich uranium—signaling diplomacy remains active even as military pressure lingers.
Market observers described oil’s current pricing as a tug-of-war between geopolitics and macroeconomics. Vandana Hari of Vanda Insights estimated Brent carries at least a $10-per-barrel “Iran risk premium,” arguing that as long as the threat of U.S. strikes hangs over diplomacy—and with U.S. naval forces concentrated in the region—it is hard to see crude falling substantially. In other words, demand fears can knock prices lower day to day, but the market is still embedding insurance against a supply shock.
Banks are also mapping a longer-term supply-demand picture that looks less tight than the headlines. Goldman Sachs said it expects the global oil market to remain in surplus in 2026 assuming no Iran-related supply disruption. Still, it raised its Q4 2026 price forecasts by $6 to $60 Brent and $56 WTI, citing lower OECD inventories. The bank also flagged downside risks if sanctions relief for Iran and Russia eventually boosts supply, estimating potential reductions of $5 and $8 to those Q4 2026 forecasts.
Overall, the session illustrated how quickly crude can pivot: tariff-driven growth anxiety and shifting risk sentiment pulled prices down, while Iran negotiations and the persistent possibility of escalation kept a floor under the market.
