Oil prices moved slightly lower on Monday, stabilizing after the strong rally seen late last week, as investors balanced fears of a potential supply surplus against rising geopolitical tensions. Markets are also positioning ahead of a key Federal Reserve policy meeting scheduled later this week.
By 08:15 ET (13:15 GMT), Brent crude futures for March delivery were down 0.2% at $64.97 a barrel, while West Texas Intermediate (WTI) crude slipped 0.3% to $60.91 a barrel. Both benchmarks had climbed more than 2% on Friday, driven largely by a sharp increase in geopolitical risk premiums.
Oil supported by geopolitical uncertainty
Oil prices have held onto most of their recent gains as geopolitical risks remain elevated. Market sentiment turned cautious after the United States signaled a stronger military stance in the Middle East.
U.S. President Donald Trump said an “armada” of U.S. naval forces, including an aircraft carrier group, was moving toward the region amid escalating tensions with Iran. Any potential conflict involving Tehran has raised concerns about possible disruptions to crude supply from one of the world’s major oil producers.
Oil markets have also been unsettled by recent geopolitical tensions surrounding Greenland, which have added to broader uncertainty across global financial markets.
On the supply side, downward pressure on prices eased after Kazakhstan’s main crude export route returned to full capacity. The Caspian Pipeline Consortium confirmed that operations at its Black Sea terminal were fully restored following repairs, allowing exports to resume at normal loading levels.
Fed meeting in focus
Despite the geopolitical backdrop, investors remain cautious about the medium-term outlook for oil. Concerns persist that global markets could face an oversupply later this year if production growth outpaces demand, particularly as output from non-OPEC producers continues to show resilience.
Attention is now turning to this week’s policy meeting of the Federal Reserve, where policymakers are widely expected to leave interest rates unchanged. Investors will closely analyze the Fed’s forward guidance for signals on the timing of potential rate cuts, as interest rate expectations can influence oil demand through their impact on economic growth and the U.S. dollar.
OPEC+ meeting ahead
Meanwhile, OPEC+ is expected to maintain its pause on oil output increases for March at a meeting scheduled for Sunday, according to a Reuters report. Prices have recently been supported by a decline in Kazakhstan’s oil production.
The meeting of eight OPEC+ members, which collectively account for roughly half of global oil supply, comes after oil prices have risen around 8% so far this month, pushing prices above $66 a barrel. This rebound has occurred despite lingering concerns that a supply glut could weigh on prices later in the year.
OPEC+ previously raised output targets by about 2.9 million barrels per day from April through December 2025—nearly 3% of global demand—while pausing monthly production increases for January through March amid weaker demand forecasts.
