WTI crude price dips below $63 as U.S.-Iran talks ease supply fears
WTI futures retreat below $63 amid nuclear diplomacy and trade-related growth fears
West Texas Intermediate (WTI) crude oil futures slid more than 1% on Monday, falling below the $63 per barrel mark as easing supply disruption fears weighed on sentiment. The pullback snapped a two-day rally and was fueled by diplomatic progress between the United States and Iran, which raised the likelihood of increased Iranian crude returning to global markets.
Iran’s foreign minister confirmed that expert-level talks would begin this week in Oman to lay the groundwork for a nuclear agreement. A U.S. official echoed the optimism, describing recent dialogue as showing "very good progress." A third round of discussions is scheduled for Saturday. This easing geopolitical tension, combined with last week's U.S. sanctions on Chinese importers of Iranian oil, has added complexity to the outlook.
USOIL price dynamics (March 2025 - April 2025) Source: TradingView.
OPEC+ supply expansion and global demand fears add pressure
Adding to the bearish pressure, OPEC+ remains on track to raise crude output by 411,000 barrels per day in May. While some of that increase may be countered by compliance efforts from countries previously exceeding their quotas, the net effect could still tilt the market toward oversupply. At the same time, concerns over a prolonged U.S.-led trade war have resurfaced, raising the risk of slower global economic growth and softer energy demand.
Despite the weakness in crude, a softer U.S. dollar limited steeper losses. The greenback's decline often provides support for dollar-denominated commodities like oil, making them relatively more attractive for foreign buyers. Still, traders are eyeing this week’s global flash PMIs and the next stage of nuclear talks for additional catalysts.
Meanwhile, the drop in oil prices is already impacting fiscal plans in major exporting nations. Angola reportedly faced a $200 million margin call linked to oil-backed bond financing. Nigeria is adjusting budget assumptions, and even wealthy Gulf producers like Saudi Arabia and the UAE are contending with prices below their fiscal break-even points.
In earlier reports, we highlighted the risk of renewed volatility tied to geopolitical shifts and production realignments. While macro factors continue to dominate, the oil market now turns its focus to nuclear diplomacy and demand-side metrics.
