Oil prices edged lower on Monday after posting gains in the previous session, as easing civil unrest in Iran reduced fears of a potential U.S. military strike that could disrupt supplies from the key Middle Eastern producer.
Brent crude slipped 28 cents, or 0.44%, to $63.85 a barrel by 07:34 GMT. U.S. West Texas Intermediate (WTI) for February delivery declined 36 cents, or 0.61%, to $59.08 a barrel. The February contract expires on Tuesday, while the more actively traded March contract was down 24 cents, or 0.40%, at $59.10.
Iran’s authorities moved to suppress protests driven by economic hardship, with officials claiming the unrest has now been brought under control. The crackdown appeared to calm markets after weeks of heightened geopolitical concern.
Donald Trump also appeared to soften his earlier rhetoric on intervention, stating on social media that Iran had halted mass executions of protesters, despite no official confirmation from Tehran. His comments were interpreted as reducing the likelihood of direct U.S. action.
That shift lowered concerns about supply disruptions from Iran, the fourth-largest producer within the Organization of the Petroleum Exporting Countries. The pullback marked a retreat from multi-month highs reached last week, even though prices ended Friday on a stronger note. Ongoing U.S. military activity in the Gulf, however, kept some geopolitical risk in place.
Market analysts noted that oil prices had been driven higher by an “Iran risk premium,” which is now being unwound as tensions ease. Additional pressure came from U.S. inventory data showing a larger-than-expected rise in crude stockpiles, reinforcing bearish supply dynamics.
U.S. trading volumes were lighter with markets closed for Martin Luther King Jr. Day. According to the Energy Information Administration, crude inventories rose by 3.4 million barrels in the week ended January 9, compared with expectations for a 1.7 million-barrel draw.
Attention also remained on developments in Venezuela after Trump said the United States would oversee the country’s oil industry following the capture of Nicolas Maduro. U.S. officials indicated they are moving quickly to grant Chevron an expanded production licence, though traders remain cautious about how quickly output could increase.
Analysts said broader geopolitical risks remain in the background, but near-term price action is likely to stay rangebound with limited catalysts. Meanwhile, data released on Monday showed that China’s refinery throughput rose 4.1% year on year in 2025, while crude oil production increased 1.5%, with both reaching record highs.
