Oil Prices Slide as U.S.-Iran Tensions Cool and India Pivots from Russian Crude

Oil prices edged lower on Monday as fears of a direct conflict in the Middle East eased following constructive indirect talks between the United States and Iran.

However, a significant shift in Indian energy policy—halting most Russian oil purchases in favor of a new trade deal with Washington—helped prevent a deeper sell-off.

Brent crude futures fell 89 cents, or 1.3%, to settle near $67.16 a barrel, while U.S. West Texas Intermediate (WTI) dropped 79 cents to $62.76. The decline follows a volatile week where prices initially spiked on fears that tensions in the Strait of Hormuz—a vital transit point for 20% of global oil—could boil over into war.

Those fears cooled after Washington and Tehran signaled progress in Omani-mediated talks. Despite the diplomatic momentum, the market remains cautious; Iran's foreign ministry warned over the weekend it would strike U.S. regional bases if attacked, keeping a "risk premium" embedded in prices.

Meanwhile, physical markets are tightening as Indian refiners pivot away from Russian crude. Following a U.S. executive order on Friday that linked trade tariff relief to a halt in Russian energy imports, major Indian processors have paused spot purchases.

Analysts suggest that if India—previously the top buyer of Russia's seaborne oil—permanently moves toward U.S. energy, it could create a sustained floor for global prices.