Oil markets remained contained in Asian trade on Monday as investors concentrated on diplomatic activity between the United States and Iran and on signs the Organization of Petroleum Exporting Countries and its allies may restart production increases in the spring.
Brent crude for April delivery was down 0.2% at $67.65 a barrel by 21:15 ET (02:15 GMT), with trading activity thinned by market holidays in both China and the United States. Weak economic growth figures from Japan also raised modest concerns about cooling demand.
The diplomatic developments center on a second round of negotiations between the U.S. and Iran over Tehran’s nuclear programme, scheduled to take place in Switzerland this week following an earlier resumption of talks in February. The renewed discussions have occurred alongside a notable U.S. military build-up in the region - Washington has deployed a second aircraft carrier to the Middle East - and public statements that suggested preparations for an extended campaign should diplomacy fail.
U.S. President Donald Trump repeatedly warned Tehran to accept a deal or face further military action. Iranian ministers said over the weekend that Tehran was prepared to compromise on its nuclear programme in exchange for relief from crippling U.S. sanctions, and they indicated that a deal now depended on choices made in Washington.
Those developments have supported a risk premium on oil in recent weeks, as traders price in the possibility that renewed hostilities could disrupt Iranian oil production.
Partially offsetting those tensions was a Reuters report that OPEC and its allies - the grouping known as OPEC+ - planned to resume increasing oil output beginning in April. The prospect of additional supply from the cartel is seen as a potential headwind to prices over time, although it would also allow member states to capitalise on recent price gains. OPEC+ is scheduled to meet on March 1.
Market participants have faced a string of concerns about a supply glut projected for 2026 that weighed on oil across 2025. Although OPEC had raised output to some degree over the past year, the group paused its production hikes in December amid ongoing supply glut worries.
Still, crude rallied to a six-month high in early-2026 as geopolitical tensions in the Middle East intensified and as signs of resilience in the global economy bolstered hopes for continued demand.
Market context
- Trading volumes were subdued due to market holidays in China and the U.S., contributing to rangebound price action.
- Renewed U.S.-Iran negotiations in Switzerland are taking place amid a notable U.S. military presence in the Middle East and strong public warnings from President Donald Trump.
- Reports that OPEC+ will resume production increases from April add a supply-side consideration that could weigh on prices over the medium term.
The balance between geopolitical risk and potential increases in OPEC+ supply will likely continue to influence oil prices in the near term, particularly as market participants await the March 1 OPEC+ meeting and monitor developments from the Swiss talks.