Oil prices ​fell 5% on Monday, after U.S. President Donald Trump said Iran was "seriously talking" with Washington, signalling de-escalation with an ⁠OPEC member to ease supply disruption concerns.

Brent crude futures were down $3.63, or 5.2%, at $65.69 per barrel at 0920 ⁠GMT. U.S. ‌West Texas Intermediate crude fell $3.60, or 5.5%, to $61.61 per barrel.

Brent and WTI fell after posting their biggest monthly increase since 2022 in January, as risks of a military ⁠strike on Iran receded after Trump's weekend comments. Brent gained 16% in January, while WTI rose by 13%.

The lack of a further escalation of tensions in the Middle East, as well as falling supply disruptions in the U.S. and Kazakhstan, weighed on oil prices, said UBS analyst Giovanni Staunovo. On ⁠Saturday Trump told reporters Iran ​was "seriously talking," hours after Tehran's top security official Ali Larijani said arrangements for negotiations were underway.

Trump had repeatedly threatened Iran with intervention ‍if it did not agree to a nuclear deal or continued killing protesters. The persistent threats have underpinned oil prices throughout January, ​said Priyanka Sachdeva, an analyst at Phillip Nova. The slump was also driven by a broader commodities markets selloff led by deep losses in gold and silver, which analysts partially attributed to a stronger U.S. dollar.

"The recent pullback has also been reinforced by renewed strength in the U.S. dollar, which typically makes dollar-denominated oil more expensive for non-U.S. buyers, further weighing on prices," Sachdeva said.

Concerns about global oil supply exceeding demand also came back into focus following de-escalation in the Middle East, analysts said. At a meeting on Sunday, OPEC+ agreed to keep its oil output unchanged for March. In November, the grouping had frozen further ⁠planned increases for January through March 2026 because of seasonally weaker ‌consumption.

"Geopolitical risks mask a fundamentally bearish oil market," Capital Economics said in a note on January 30.

"The historical example of last year's 12-day war (between Israel and Iran), and a well-supplied oil market, will ‌still bear down ⁠on Brent crude prices by end-2026."

(Reporting by Enes Tunagur in London; Additional reporting by Katya Golubkova in Tokyo ⁠and Sudarshan Varadhan in Singapore; Editing by Chris Reese, Thomas Derpinghaus and Clarence Fernandez)