London, Feb 5, 2026, 12:04 (GMT) — Regular session
- Brent slipped 1.2% to $68.60 a barrel; WTI dropped roughly 1.3%
- U.S. and Iran scheduled talks in Oman for Friday, easing the Middle East risk premium
- U.S. crude inventories dropped by 3.5 million barrels last week. The next report is scheduled for Feb. 11.
Brent crude futures dropped over 1% on Thursday, sliding 86 cents to $68.60 a barrel by 1036 GMT. The move came after the U.S. and Iran agreed to hold talks in Oman on Friday. Meanwhile, U.S. West Texas Intermediate crude fell 82 cents, or about 1.3%, to $64.32. John Evans, analyst at PVM Oil Associates, warned, “One untoward remark or a breakdown in talks and the Brent price will soon be banging on the door of $70 a barrel.” Reuters
After days of back-and-forth on where and how talks should happen, the negotiations narrowly avoided collapse. “If the Iranians want to meet, we’re ready,” U.S. Secretary of State Marco Rubio told reporters. Iranian officials, meanwhile, insisted the missile program was “off the table” — a divide that continues to unsettle markets. Reuters
Tensions in the Strait of Hormuz grab attention because it’s a crucial chokepoint. In 2024 and early 2025, over a quarter of global seaborne oil trade passed through here, along with roughly one-fifth of worldwide oil and petroleum product consumption, according to analysis by the U.S. Energy Information Administration. The bulk of this crude is destined for Asia.
The risk premium—the additional cost traders accept to hedge against supply disruptions—has been easing in other areas as well. “Talks between Iran and the United States appear to be back on track … removing some of the geopolitical premium, particularly oil,” noted Tony Sycamore, an analyst at broker IG. Reuters
Brent is active during ICE’s key London session, running from 01:00 to 23:00 local time, making its price especially reactive to news headlines throughout the day.
U.S. inventory figures provided some backing earlier this week. Commercial crude stocks, not counting the Strategic Petroleum Reserve, declined by 3.5 million barrels to 420.3 million barrels. Distillate inventories also slid, down 5.6 million barrels, while gasoline stocks inched up 0.7 million barrels, according to the EIA’s weekly report.
Volatility has driven a surge in hedging activity. In January, investors traded a record 1.9 million WTI Midland at Houston contracts on ICE, hitting a single-day high on Jan. 30, Reuters reported. Producers and traders moved quickly to lock in prices and manage risk. Jeff Barbuto, senior vice president of global oil markets at ICE, noted, “The return of Venezuelan crude has created potential new competition for Canadian oil on the U.S. Gulf Coast and in other export markets, including China.” Reuters
Discounts on Russian crude heading to China have deepened as sellers vie for Asian buyers, with demand from India appearing less certain. Traders told Reuters that ESPO Blend discounts to China have nearly hit $9 a barrel below ICE Brent, while Urals discounts sit close to $12. “India’s pullback is likely to push discounts even lower, so this trend should persist short term,” said Vortexa analyst Emma Li. Reuters
On Thursday, prices slipped back after a strong gain the day before, when Brent closed at $69.46, marking a 3.16% rise, according to Investing.com historical data.
That said, the risk isn’t just downhill. A smooth diplomatic path might cap prices, but any sign of a blunder — whether a harder U.S. approach, a slip-up at sea, or a canceled meeting — would quickly shove the risk premium right back in.
Friday, Feb. 6, brings the Oman meeting into focus. Traders are also eyeing the weekly U.S. petroleum report set for Feb. 11, looking for clues on stock movements amid changing refinery activity and winter demand.
