(Bloomberg) — Oil retreated as traders fretted about the impact of the US-led trade war on energy demand, while monitoring talks between Washington and Tehran over the Islamic republic’s nuclear program.

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Brent (BZ=F) fell as much as 2% to below $67 a barrel, while West Texas Intermediate (CL=F) was near $64. Data that’s set to show how President Donald Trump’s trade policies are affecting the global economy could provide fresh evidence of a slowdown, including a revised outlook from the International Monetary Fund.

Iran’s foreign minister said his country had a “better understanding” with the US on a range of principles after talks Saturday on Tehran’s nuclear program. The discussions, which lasted for more than three hours, will resume Wednesday in Oman, and have the potential to affect Iranian crude supplies.

“Everything is flashing bearishness — from macro, to fundamentals, and to geopolitics ,” said Gao Jian, an analyst at Qisheng Futures Co. “Worries over an economic recession remain the core risk.”

Broader financial market’s also carried a risk-off tone on Monday, hurting many commodities. A gauge of the dollar fell to the lowest since January 2024 and US stock-index futures retreated after Trump criticized the Federal Reserve.

NY Mercantile - Delayed Quote•USD

(BZ=F)

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66.84

-

(-1.65%)

As of 3:20:26 AM EDT. Market Open.  Advanced Chart

Oil has declined sharply this month, touching a four-year low at one point, driven by investors’ fears that the onslaught of tariffs and counter-levies between the US and its biggest trading partners including China will sap crude demand. The drop has been compounded by an OPEC+ decision to bring back production at faster-than-expected pace, reviving concerns about a glut.

NY Mercantile - Delayed Quote•USD

(CL=F)

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63.55

-

(-1.75%)

As of 3:21:29 AM EDT. Market Open.  Advanced Chart

“Nuclear talks between the US and Iran appear to be progressing relatively well, helping to ease a fairly big supply risk hanging over the oil market,” said Warren Patterson, Singapore-based head of commodities strategy at ING Groep NV. “It’s early days still, but the fact that further talks are planned suggests we are at least heading in the right direction.”

Trading volumes may be lower than usual in Monday’s session, with some countries observing holidays to mark Easter. At the same time, contango pricing — a bearish pattern — has returned to parts of the futures curve, with some longer-dated contracts trading above nearer-dated ones.

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In Ukraine, meanwhile, President Volodymyr Zelenskiy accused Kremlin forces of violating an Easter Sunday truce declared by Russian President Vladimir Putin. The US earlier proposed to allies a possible easing of sanctions against Russia in the event of lasting ceasefire.

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