LONDON, Feb 2, 2026, 11:27 GMT — Regular session
Oil prices dropped about 5% on Monday after Donald Trump said Iran was “seriously talking” with the U.S., easing fears of supply disruptions. Brent crude futures tumbled $3.63, or 5.2%, to $65.69 a barrel by 0920 GMT. U.S. West Texas Intermediate crude dipped $3.60, or 5.5%, settling at $61.61. Giovanni Staunovo from UBS cited easing Middle East tensions and fewer disruptions in the U.S. and Kazakhstan. Meanwhile, Priyanka Sachdeva at Phillip Nova noted that renewed dollar strength “reinforced” the selloff as gold and silver prices also slid. Reuters
The plunge highlights just how fast a geopolitical risk premium — the extra cost traders tack on to hedge supply risks — can evaporate from crude prices. As the Iran headlines faded, focus shifted back to fundamentals: demand, supply, and the dollar.
OPEC+ held steady on production for March following its weekend meeting, despite Brent crude hitting six-month highs amid Iran-related tensions late last week. The coalition of OPEC members and Russia offered no clues about plans beyond March, with the next sit-down scheduled for March 1. Jorge Leon, head of geopolitical analysis at Rystad Energy, said, “With rising uncertainty around Iran and U.S. tensions, the group is keeping all options firmly on the table.” Reuters
OPEC announced it has received updated compensation plans from Iraq, the United Arab Emirates, Kazakhstan, and Oman to offset production that exceeded agreed limits, with schedules extending through June. Kazakhstan is expected to shoulder most of the make-up cuts, the group said.
Traders are eyeing demand cues from China following a spike in prices last month. Reuters columnist Clyde Russell noted that crude oil still factors in a $7-$8 per barrel risk premium related to Iran. He added that if prices remain elevated, Chinese buyers might pull back on their purchases.
The U.S. Energy Information Administration plans to release its next weekly petroleum status report on Feb. 4, scheduled for 10:30 a.m. ET. This report is closely watched by traders for insights into U.S. crude inventories, fuel stockpiles, and refinery activity.
Friday marks the release of the U.S. jobs report, putting the dollar and demand forecasts under fresh scrutiny. The U.S. Bureau of Labor Statistics will publish the Employment Situation report on Feb. 6 at 8:30 a.m. ET.
This could flip quickly. Should talks with Iran hit a dead end—or new outages disrupt supply—traders might push the risk premium back up, despite ongoing concerns about oversupply.
