RoydadNaft –  Oil prices traded almost flat on Monday as investors assessed the potential impact of upcoming U.S.-Iran talks aimed at easing tensions, even as OPEC+ is set to resume increasing output soon.

According to Roydad Naft, Brent crude futures fell 3 cents to $67.72 per barrel (as of 07:27 GMT).

U.S. WTI crude stood at $62.86 per barrel, down 3 cents. There will be no WTI settlement today due to a U.S. public holiday.

Both benchmarks posted weekly declines last week: Brent fell about 0.5%, while WTI dropped around 1%. The slide came after U.S. President Donald Trump stated on Thursday that an agreement with Tehran could be possible next month, triggering the price drop.

The two countries are scheduled to hold their second round of talks on Tuesday in Geneva. These discussions resumed earlier this month in an effort to resolve decades-long disputes over Iran’s nuclear program and prevent a new military confrontation.

An Iranian diplomat reported on Sunday that Iran is seeking a nuclear deal with the United States that would deliver economic benefits for both sides, with topics such as energy and mining investments, as well as aircraft purchases, on the agenda.

Tony Sycamore, market analyst at IG, commented: “Given that both sides will likely stick firmly to their core red lines, expectations for a deal remain low—this feels like the calm before the storm.”

U.S. officials told Reuters that the United States has deployed a second aircraft carrier to the region and is preparing for the possibility of a prolonged military campaign should the talks fail. Iran’s Islamic Revolutionary Guard Corps has warned that any attack on Iranian soil would prompt retaliation against every U.S. military base.

While U.S.-Iran tensions are supporting oil prices, OPEC and its allies (OPEC+) are inclined to restart production increases from April after a three-month pause, in order to meet peak summer demand (according to Reuters sources).

Global financial market activity is expected to remain limited on Monday due to Lunar New Year holidays in China, South Korea, and Taiwan, as well as Presidents’ Day in the United States.

Sogand Sachdeva, founder of SS WealthStreet in New Delhi, said: “With no clear signs of Chinese demand this week, liquidity is thin and price action could stay choppy.”

She added that in the short term, geopolitical developments and inventory data will be the main drivers of volatility, leaving crude oil vulnerable to sharp two-way swings.