Oil declines on profit-taking, global geopolitical tensions

Oil drilling rigs

Oil prices declined on Monday on profit-taking after a nearly 6% rise last week, driven by escalated global geopolitical tensions.

Brent crude for January delivery fell by 0.73% or 55 cents to $74.62 a barrel as of 09:09 am KSA time.

Meanwhile, US WTI crude futures for January delivery dropped by 0.81% or 58 cents to $70.66 a barrel.

Both contracts last week gained about 6% following heightened geopolitical tensions sparked by Ukraine's missile strikes on Russia using British and US weapons, to which Russia responded by launching a medium-range hypersonic missile.

IG Markets strategist Yeap Jun Rong of told Reuters that Russia and Ukraine are vying for leverage ahead of potential future negotiations under the new US administration led by Donald Trump. This dynamic is likely to support oil prices within the $70 to $80 per barrel range.

Separately, the International Atomic Energy Agency (IAEA) passed a resolution last week requiring Iran to enhance its cooperation. In response, Tehran took measures including activating new centrifuges for uranium enrichment.