Oil Prices Decline Amid U.S.-Iran Thaw and Strong Dollar
Oil prices have dropped for the second consecutive day, driven by indications of reduced tensions between the United States and Iran, along with a robust dollar impacting prices.
Brent crude is now priced at $65.91 per barrel, while West Texas Intermediate (WTI) stands at $61.83 per barrel, both down by 0.5% from the previous session.
Prices had already decreased by over 4% on Monday, following comments from President Donald Trump suggesting that Iran is "seriously talking" with Washington, hinting at a potential easing of hostilities between the two nations, according to Reuters.
Officials from both Iran and the U.S. are scheduled to resume nuclear negotiations next Friday in Turkey, while warning Trump that the deployment of large U.S. warships in the region could lead to "bad things" if no agreement is reached.
Priyanka Sachdeva, senior market analyst at Philip Nova, noted that the recent fluctuations in oil prices are influenced more by market sentiment than by any fundamental changes, stating that previous gains could not be sustained due to mixed macroeconomic data and a lack of new geopolitical escalations.
Additionally, the dollar index has surged to near record levels, its highest in over a week, which has constrained oil price increases, as a strong dollar diminishes foreign demand for dollar-denominated crude.
On the trade front, Trump announced a deal with India to cut U.S. tariffs on Indian goods from 50% to 18%, in exchange for New Delhi halting its purchases of Russian oil and reducing trade barriers, potentially opening avenues for India to buy oil from the U.S. and possibly Venezuela.
In this context, India has recently begun to reduce its imports of Russian oil, dropping from approximately 1.2 million barrels per day in January to an expected one million barrels per day in February, and further down to 800,000 barrels in March.
Meanwhile, the OPEC+ alliance has announced it will maintain its production levels unchanged for March, after eight member countries—including Saudi Arabia, Russia, the UAE, Kazakhstan, Kuwait, Iraq, Algeria, and Oman—agreed to increase their production quotas by about 2.9 million barrels per day from April to December 2025, representing nearly 3% of global demand.
