Global oil prices are experiencing their first weekly decline of 2026. A wave of pessimism has hit the energy market, marking the strongest downturn since the beginning of the year.
The decline comes after former President Donald Trump announced he is ready for lengthy negotiations with Iran concerning the nuclear agreement. This shift in rhetoric has triggered a sharp drop in oil prices, with West Texas Intermediate (WTI) stable below $63, losing over 3% in value in just one day.
The International Energy Agency (IEA) further fueled concerns with its monthly report, forecasting a substantial surplus of 3.7 million barrels per day globally in 2026. The report stated, “We are witnessing the fastest growth in global stocks since the pandemic. The market simply does not need as much oil as is currently being produced.”
As oil prices fall, there is typically a delayed reaction in retail markets. Analysts expect this to lead to a decrease in fuel prices at gas stations within the next week or two. If oil remains below $65 per barrel for Brent, gas station networks may be compelled to lower their prices to remain competitive.
Currently, a unique situation is unfolding where diplomacy and overproduction are benefiting consumers. If negotiations between Trump and Iran progress without issue, this drop in oil prices could signal the start of a prolonged era of cheaper fuel.
Oil prices are down for the first week of 2026 after Trump's comments on Iran negotiations, raising hopes for lower fuel costs as global surplus is expected.