Oil declines due to nuclear talks with Iran, new tariff uncertainty in the US

Oil prices fell 1% on Monday as the US and Iran moved towards a third round of nuclear talks, easing concerns about a potential conflict, while President Donald Trump created uncertainty for global growth and fuel demand with a new round of tariff hikes. Brent crude futures were down 75 cents, or 1.05%, at $71.01 a barrel at 0055 GMT, while U.S. West Texas Intermediate crude futures were at $65.74 a barrel, down 74 cents, or 1.11%.

Trump said Saturday he would raise a temporary tariff from 10% to 15% on U.S. imports from all countries, the maximum level allowed under law, after the U.S. Supreme Court struck down his previous tariff program.

“The tariff news over the weekend has resulted in some risk-off flows this morning, which are reflected in the price of gold and US stock futures and are weighing on crude oil prices,” said IG Markets analyst Tony Sycamore.

The rate decision offset growing concerns about a military conflict between the US and Iran, pushing Brent and WTI prices up more than 5% last week.

Iran and the US will hold a third round of nuclear talks in Geneva on Thursday, Oman Foreign Minister Badr Albusaidi said on Sunday.

Sycamore said the announcement supported his view that the US and Iran are currently engaged in a diplomatic cat-and-mouse game. “I do not believe the US wants to attack Iran given the risks it poses in terms of regional destabilization and, closer to home, voter dissatisfaction ahead of the November midterm elections,” Sycamore said.

Iran has indicated it is willing to make concessions on its nuclear program in return for lifting sanctions and recognizing its right to enrich uranium, a senior Iranian official told Reuters.