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Oil Pulls Back as Tariff Hike Darkens Demand Outlook With U.S.–Iran Talks Set in Geneva

Prices have eased following confirmation of Thursday’s Geneva talks, with a sizable geopolitical premium still embedded.

Overview

  • Brent and WTI slipped roughly 0.6%–1% on Monday, retreating from last week’s multi‑month highs after traders priced in weaker demand from President Donald Trump’s move to lift temporary import tariffs to 15%.
  • Oman’s foreign minister confirmed a third round of U.S.–Iran nuclear talks for Thursday in Geneva, a development that cooled immediate conflict fears that had recently pushed Brent above $72.
  • The U.S. Energy Information Administration reported a 9 million‑barrel crude draw last week, offering near‑term support even as paper prices softened on macro worries.
  • S&P Global’s Daniel Yergin estimated roughly a $10 per‑barrel anxiety premium linked to U.S.–Iran tensions, reflecting heavy hedging and elevated options activity reported across oil markets.
  • Goldman Sachs projected a 2026 surplus if Iranian supplies are not disrupted and raised late‑2026 price forecasts on lower OECD inventories, while cautioning that sanctions relief could add downside risk.