Finance
Oil settles almost 3% down on easing supply concerns ahead of US, Iran talks
Published by Global Banking & Finance Review®
Posted on February 5, 2026
3 min readLast updated: February 5, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on February 5, 2026
3 min readLast updated: February 5, 2026
US oil prices dropped as US-Iran talks loom, with WTI crude falling 1%. Market reactions and geopolitical tensions are key factors.
By Seher Dareen and Georgina McCartney
HOUSTON, Feb 5 (Reuters) - Oil prices settled down almost 3% on Thursday in choppy trading, after the U.S. and Iran agreed to hold talks in Oman on Friday, easing concerns about Iranian crude supplies.
Brent crude futures settled down $1.91, or 2.75%, at $67.55 per barrel. U.S. West Texas Intermediate crude settled down $1.85, or 2.84%, at $63.29.
"There is still scepticism that any reasonable deal can be made with Iran so even though the market right now is giving talks the benefit of the doubt, we still don't know what the outcome will be of those talks," said Phil Flynn, senior analyst with Price Futures Group.
The discussions come as the U.S. builds up forces in the Middle East, and regional players seek to avoid a military confrontation that many fear could escalate into a wider war.
"Differing expectations around the scope and objectives of the talks are sustaining uncertainty, injecting volatility into crude prices as traders reassess the likelihood of escalation versus diplomacy," analysts at Aegis Hedging said in a note.
About a fifth of the world's total oil consumption passes through the Strait of Hormuz between Oman and Iran. Other OPEC members, Saudi Arabia, the United Arab Emirates, Kuwait and Iraq, export most of their crude via the strait, as does Iran.
Volatility has led investors to rush to lock in oil prices this year, trading a record number of WTI Midland at Houston contracts in January, amid concerns around Middle Eastern supply risks and more Venezuelan barrels heading to the U.S. Gulf Coast.
Strength in the U.S. dollar and volatility in precious metals also weighed on commodities and risk sentiment more broadly on Thursday, analysts said.
On the supply side, discounts on Russian oil exports to China widened to new records this week as sellers cut prices to attract demand from the world's top crude importer and offset the likely loss of Indian sales, traders said.
This week, a trade deal was announced between the U.S. and India, which agreed to halt purchases of Russian crude.
Argentina's energy trade surplus could rise in 2026 from last year's record due to crude output from the Vaca Muerta shale formation, to a range of $8.5 billion to $10 billion, three analysts told Reuters.
(Reporting by Georgina McCartney in Houston, Seher Dareen in London, Additional reporting by Enes Tunagur in London, Katya Golubkova in Tokyo and Siyi Liu in Singapore. Editing by Jan Harvey, Mark Potter and David Gregorio)
West Texas Intermediate (WTI) is a grade of crude oil used as a benchmark in oil pricing. It is extracted from oil fields in the United States and is known for its light and sweet characteristics.
Brent crude futures are contracts for the future delivery of Brent crude oil, which is extracted from the North Sea. It serves as a global benchmark for oil prices.
The dollar index measures the value of the United States dollar against a basket of foreign currencies. It reflects the dollar's strength and is used to gauge the overall performance of the currency.
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