London, Feb 3, 2026, 11:34 GMT — Regular session
Oil prices slipped Tuesday as traders dialed back some geopolitical risk premium ahead of U.S.-Iran talks set for Friday in Turkey. Brent crude futures dropped 15 cents to $66.15 a barrel by 1016 GMT, while U.S. West Texas Intermediate lost 8 cents, settling at $62.06. Both benchmarks earlier touched their lowest levels in a week. Kelvin Wong of OANDA pointed to recent swings reflecting the “geopolitical risk premium” tied to the “on-off” tensions with Iran. Meanwhile, Priyanka Sachdeva at Phillip Nova described the market as “choppy,” with risks leaning lower. Reuters
Monday’s selloff set the tone, with both benchmarks dropping over $3 a barrel following Donald Trump’s comment that Iran was “seriously talking” with the U.S. Brent closed down $3.02, or 4.4%, at $66.30, while WTI slid $3.07, or 4.7%, to $62.14. Analysts flagged a stronger dollar after Trump nominated Kevin Warsh for Federal Reserve chair, alongside softer U.S. weather forecasts, as diesel futures tumbled more than 6%. PVM Oil Associates noted Brent rose 16% and WTI 14% in January, but market focus is now turning toward an inventory build. Reuters
That shift is significant since crude prices have recently responded more to headlines than to daily fuel demand. The risk premium—the added cost traders accept for potential supply disruptions—can vanish quickly when diplomacy seems likely, making oil prices more reactive to demand figures and dollar fluctuations.
Russia’s Deputy Prime Minister Alexander Novak said the global market is balanced, with demand expected to pick up in March and April. “Starting from around March or April, demand has been gradually increasing,” he told reporters. OPEC+, the group including OPEC and allies led by Russia, decided to keep output steady for March. Reuters
A U.S.-India trade deal remains unpredictable. Trump proposed cutting tariffs on Indian goods from 50% to 18% if India stops buying Russian oil and increases U.S. crude imports. But two refining sources said Indian refiners haven’t been ordered to halt purchases yet and need time to finish cargoes already booked for February loading and March delivery. One source warned that a total stop would disrupt operations at Nayara Energy’s 400,000-barrel-per-day refinery.
Trade figures reveal India’s imports of Russian crude dropped about 22% in December, hitting 1.38 million barrels per day—the lowest level in two years—as tougher U.S. and EU sanctions crimped shipments. Russia remained India’s top oil supplier, but its share declined to 27.4%, while OPEC’s portion climbed to 53.2%, the data indicated. Nayara, which Rosneft partly owns, has been relying solely on Russian oil after other vendors stepped back.
Oil traders are gearing up for more volatility. Prices are dropping while the dollar stays strong, shifting the market’s focus to trading within ranges rather than clear trends.
The downside isn’t set in stone. If talks on Friday falter or tensions resurface, traders might swiftly push the risk premium back up. Plus, OPEC+ still faces a decision on its plans beyond March.
Friday, Feb. 6, brings negotiations in Turkey into focus, along with U.S. inventory figures that could shift sentiment in already thin markets. The U.S. Energy Information Administration plans to release its weekly petroleum status report at 10:30 a.m. Eastern on Wednesday, Feb. 4.
