London, Feb 2, 2026, 11:29 GMT — Regular session
- Brent slipped 5.2% to hover around $65.70; WTI dropped 5.5%, trading near $61.60 in early moves
- Trump says Iran is “seriously talking” as traders shed concerns over Middle East supply risks
- OPEC+ keeps March production unchanged; attention turns to inventory levels and U.S. employment figures
Oil prices dropped about 5% on Monday after U.S. President Donald Trump said Iran was “seriously talking” with Washington, easing fears of a supply disruption from the OPEC member. By 0920 GMT, Brent crude futures slid $3.63, or 5.2%, to $65.69 a barrel, while U.S. West Texas Intermediate fell $3.60, or 5.5%, to $61.61. This decline came after January’s biggest monthly gains since 2022 — with Brent up 16% and WTI 13%. UBS analyst Giovanni Staunovo attributed the move to quieter Middle East headlines and fewer outages in the U.S. and Kazakhstan. Priyanka Sachdeva of Phillip Nova noted a “renewed strength in the U.S. dollar,” and Capital Economics said geopolitical tensions had obscured a “fundamentally bearish” oil market. Reuters
This matters because crude has been priced with a geopolitical risk premium—the extra cost traders accept fearing sudden supply disruptions. When that premium fades, markets usually turn less forgiving.
So, the usual suspects remain in control: supply discipline, demand cues, and the real flow of crude. After January’s headline-fueled rally, this feels like a risky mix—positions can get overstretched fast, and the pullback hits hard.
OPEC’s secretariat said it has received updated compensation plans from Iraq, the UAE, Kazakhstan, and Oman for pumping beyond their quotas, with these schedules extending through June. On Sunday, OPEC+ — the group of OPEC members plus allies like Russia — decided to keep output steady in March, continuing the freeze on planned increases announced last November due to seasonal demand dips.
Oil’s drop coincided with a wider retreat in commodities and energy contracts, driven by a stronger dollar and sliding metals prices. U.S. natural gas futures tumbled roughly 15%, while gasoline and heating oil futures each dropped nearly 4%, according to MarketWatch.
A stronger dollar hits crude because oil trades in dollars. As the greenback climbs, barrels become pricier for buyers paying with other currencies, which can slightly curb demand.
Yet, this shift might not last. If U.S.-Iran talks falter or a key producing area faces new turmoil, the risk premium could quickly resurface in Brent and WTI prices.
This week’s U.S. data kicks off with the Energy Information Administration’s weekly petroleum status report, typically released after 10:30 a.m. Eastern on Wednesday. Then, Friday brings the U.S. January payrolls report at 8:30 a.m. Eastern.
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