Oil Prices Fall on Iran Nuclear Deal Progress, Ukraine Ceasefire

Global oil prices experienced a notable downturn on Monday, reacting to shifts in the geopolitical landscape. Key developments included renewed diplomatic efforts concerning Iran’s nuclear program and a temporary lull in the conflict in Ukraine, both contributing to market adjustments.

Nuclear Diplomacy Weighs on Crude Prices

Oil futures registered significant declines as discussions between Iran and the United States regarding the revival of a nuclear agreement showed signs of progress. Following indirect talks facilitated by Oman in Rome, both nations agreed to commence technical meetings aimed at potentially restoring the 2015 nuclear pact. These expert-level discussions are set to begin in Oman.

Iranian officials described the preceding negotiations as “constructive,” suggesting a better mutual understanding of core principles and objectives. The prospect of reviving the deal, which could lead to the lifting of international sanctions against Iran, raises the possibility of increased Iranian oil exports flooding the global market. This potential surge in supply has exerted downward pressure on crude prices.

Furthermore, the current US administration, under President Donald Trump, has recently urged the rapid conclusion of a new treaty designed to prevent Iran from developing nuclear weapons, hinting at potential military options if diplomatic efforts fail. Iran maintains its nuclear activities are for peaceful purposes but remains open to negotiating certain limitations in exchange for sanctions relief. Successful negotiations could diminish the geopolitical risk premium often factored into oil prices.

Temporary Ceasefire Offers Brief Market Respite

Adding to the downward pressure on oil was a brief, one-day ceasefire in Ukraine announced by Russian President Vladimir Putin to mark Orthodox Easter. Although the truce was short-lived, expiring after Sunday without extension despite international calls, its announcement provided a momentary easing of geopolitical tensions.

While both Russia and Ukraine accused each other of violating the pause, the mere existence of the ceasefire fostered tentative hopes for potential de-escalation in the conflict. This temporary reduction in perceived geopolitical risk further contributed to the softening of energy market sentiment during the trading session.

Market Performance

The impact of these geopolitical factors was reflected in the oil futures markets late on Monday:

Contract	Movement	Price (approx.)
Brent Futures (June delivery)	Decreased by 1.8%	$66.76 per barrel
West Texas Intermediate (WTI) Crude	Decreased by 1.9%	$62.82 per barrel

These declines followed gains of over 3% for both benchmarks in the preceding week, which saw trading shortened by the Good Friday holiday in many regions.