Photo caption: Oil
Oil prices dropped nearly 4% on Monday, erasing much of last week’s conflict-driven gains, as traders reacted to signs of easing tensions between Israel and Iran. The reversal came sharply after a Wall Street Journal report indicated that Iran is urgently signaling its desire to halt hostilities and resume negotiations over its nuclear program. Brent crude fell approximately 3.65% to trade near $75.50 per barrel, while U.S. West Texas Intermediate (WTI) slipped about 3.71% to around $70.27 during intraday trading.
The sharp retreat comes after a dramatic rally last week, when Brent gained roughly 12.5% and WTI climbed about 13% on escalating Middle East tensions.
On Friday alone, both benchmarks surged nearly 7% following reports of Israeli strikes targeting Iranian military and oil-related sites, fueling fears of major disruptions to regional oil flows.
However, over the weekend, fresh signals of diplomatic outreach between Israel and Iran have helped calm markets, also prompting panicked oil shippers into some sort of temporary calm. So far, key energy infrastructure and shipping routes — including the crucial Strait of Hormuz — have been spared from damage, easing immediate supply concerns.
As FXStreet notes, traders are now watching diplomatic developments closely, with hopes that further escalation can be avoided.
The sharp drop in oil prices may also ease inflationary pressures globally, potentially influencing monetary policy decisions ahead of key central bank meetings, including the U.S. Federal Reserve.
Still, analysts warn that the situation remains highly fluid. Any renewed hostilities in the region could quickly reverse the declines and send prices sharply higher again, particularly any event targeting oil and gas infrastructure.
Some analysts also pointed to technical factors contributing to Monday’s drop. After last week’s sharp rally, oil prices appeared overbought, triggering profit-taking by hedge funds and other speculative traders who had aggressively built long positions during the conflict, according to several market participants.
=== Oilprice.com ===
OPEC oil output increase falls short of target
OPEC’s crude oil production rose by 180,000 barrels per day (bpd) to 27 million bpd in May, with producers part of the OPEC+ agreement raising output by much less than the 411,000 bpd headline hike planned for last month as some members compensated for past overproduction.
The five OPEC members that have pledged cuts in the OPEC+ agreement – Saudi Arabia, Iraq, UAE, Kuwait, and Algeria – and are now gradually unwinding these cuts had to raise their combined output by 310,000 bpd in May.
But OPEC’s Monthly Oil Market Report (MOMR) showed on Monday that these five OPEC producers raised their output by much less than that figure.
OPEC leader and top producer, Saudi Arabia, raised its output by 177,000 bpd in May, the secondary sources in the OPEC report found. Saudi Arabia pumped 9.183 million bpd, fairly close to a target of 9.2 million bpd, per OPEC’s plan for production in May.
Iraq cut production by 50,000 bpd to 3.93 million bpd, compared to its target of 4.049 million bpd. Iraq is compensating for previous overproduction as it has been one of the main overproducers in the OPEC+ deal for years, alongside Kazakhstan and Russia, non-OPEC members of the OPEC+ pact.
Total OPEC+ production in May averaged 41.23 million bpd in May 2025, which is 180,000 bpd higher compared to April, the OPEC report showed.
The eight OPEC+ producers involved in the cuts increased output by 154,000 bpd – much lower than 411,000 bpd, due to the compensation cuts.
However, the most defiant OPEC+ producer, Kazakhstan, pumped as much as 1.803 million bpd in May, down by 21,000 bpd from April, but more than 300,000 bpd above its May quota of 1.486 million bpd.
One of the key goals of the increased OPEC+ quotas this summer is to “provide an opportunity for the participating countries to accelerate their compensation,” as OPEC has repeatedly said when it announced three 411,000-bpd hikes in three consecutive months.
The lower OPEC output compared to the plans may ease concerns of oversupply, although the market is now almost exclusively focused on potential supply disruptions in the Middle East amid an escalating Israel-Iran conflict.
=== Oilprice.com ===
RCCG worshippers escape building collapse in Lagos
Members of the Redeemed Christian Church of God Liberty Parish located at No. 5, Craig Street escaped death after concrete pillars from a building under construction fell onto the church structure in Lagos on Monday.
According to the Lagos State Emergency Management Agency, the collapse of a two-storey building under construction was at Craig street off Apata Road in the Shomolu area of Lagos State.
LASEMA Permanent Secretary, Dr Olufemi Oke-Osanyintolu, confirmed this in a statement made available to the News Agency of Nigeria on Monday in Lagos.
Oke-Osanyintolu said the incident occurred during the decking phase of the construction,”Upon arrival at the incident scene, it was discovered that the structure was one of two structures being erected at the site.
“No casualties were recorded as workers reportedly evacuated the site before the arrival of emergency responders,” he said.
He also said that the collapse affected a nearby church, the RCCG Liberty Parish located at No. 5, Craig St., after concrete pillars from the collapsed building, fell onto the structure.
“Worshippers present in the church escaped unhurt, and no injuries were reported,” LASEMA boss said.
“A coordinated search has been carried out to confirm that no one was trapped under the rubble.
“The affected site has since been cordoned off to prevent secondary incidents
“Residents and bystanders have been advised to steer clear of the collapsed structure for their safety.
“He said the immediate cause of the incident was yet to be ascertained, adding that further investigations would be conducted.
“Search and rescue operation has been concluded,” Oke-Osanyintolu said.
