By: Economy Middle east

Crude oil prices remained relatively stable on Monday as market participants analyzed the potential effects of upcoming diplomatic discussions between the United States and Iran. These talks, which aim to reduce regional friction, are being weighed against the prospect of OPEC+ increasing its global supply. Brent crude futures saw a minor gain of 2 cents, reaching $67.76 per barrel, while U.S. West Texas Intermediate (WTI) crude also edged up by 2 cents to trade at $62.77 per barrel. Due to a public holiday in the United States, there will be no official settlement for WTI today.

Both major oil benchmarks recorded weekly losses last week, with Brent falling approximately 0.5 percent and WTI dropping by 1 percent. This decline was largely triggered by remarks from U.S. President Donald Trump, who suggested on Thursday that a deal between Washington and Tehran could be reached within the coming month. Following a resumption of negotiations earlier in February, the two nations are set to convene for a second round of “talks in Geneva” this Tuesday. These sessions are intended to address long-standing disagreements regarding Tehran’s nuclear program and to prevent further military escalation.

Diplomatic talks amid friction

Tehran is actively seeking a nuclear accord with the U.S. that provides significant economic advantages for both countries. According to reports from an Iranian diplomat on Sunday, the discussions are expected to cover potential investments in the mining and energy sectors, as well as the purchase of commercial aircraft. While these diplomatic efforts continue, the situation remains complex as both sides prepare for various outcomes.

The U.S. has increased its regional naval presence with the deployment of a second aircraft carrier. Following this move, Iranian officials have indicated they are prepared to respond to any actions directed at their territory, specifically noting the proximity of regional military bases. These geopolitical tensions have historically placed upward pressure on energy prices.

OPEC+ and global trading volume

In light of these tensions, the OPEC+ alliance is reportedly considering “resuming output increases” starting in April. This potential move follows a three-month pause and is aimed at satisfying the heightened energy demand typically seen during the peak summer season. Meanwhile, trading activity in global financial markets is expected to be quiet on Monday, as markets in China, South Korea, and Taiwan are closed for the Lunar New Year, while the U.S. observes Presidents’ Day.

Geopolitical risk premium

Additional downward pressure on prices stemmed from the International Energy Agency (IEA) recently lowering its global oil demand growth forecast for 2026, citing a faster-than-expected transition to electric vehicles in China and Europe. Despite the relative stability on Monday, crude prices have still risen more than 11 percent so far this year, supported by a “geopolitical premium” that analysts at BOK Financial estimate at $5 to $7 per barrel The upcoming OPEC+ meeting on March 1 remains a focal point, as delegates from Saudi Arabia and the UAE reportedly favor reclaiming market share from sanctioned producers, though Russia remains cautious due to ongoing infrastructure constraints. Further complicating the outlook, recent drone strikes along the Black Sea coast damaged fuel storage facilities at Russia’s Taman seaport over the weekend, reminding traders that supply risks extend beyond the Middle East.