Oil prices climbed about 2% on Tuesday, February 3, 2026, after the United States military shot down an Iranian drone and armed boats approached a U.S.-flagged vessel in the Strait of Hormuz.
The development raised concerns that talks aimed at de-escalating United States-Iran tensions could be disrupted.
Brent futures rose $1.03, or 1.6%, to settle at $67.33 per barrel, while U.S. West Texas Intermediate crude rose $1.07, or 1.7%, to settle at $63.21.
On Monday, both crude benchmarks had dropped more than 4% after U.S. President Donald Trump said Iran was “seriously talking” with Washington.
But on Tuesday, the U.S. military shot down an Iranian drone that “aggressively” approached the Abraham Lincoln aircraft carrier in the Arabian Sea.
In the Strait of Hormuz between the Persian Gulf and the Gulf of Oman, a group of Iranian gunboats approached a U.S.-flagged tanker north of Oman, maritime sources and a security consultancy said on Tuesday.
OPEC members Saudi Arabia, Iran, the United Arab Emirates, Kuwait, and Iraq export most of their crude via the strait, mainly to Asia.
Oil prices drop amid US-Iran de-escalation, firm dollar
“The diplomatic effort to avoid a U.S. military strike in Iran is unravelling. It would appear (elements in Iran) are trying their best to sabotage the process right now,” a director of energy futures at Mizuho, Bob Yawger, told Reuters.
Iran was the third-biggest OPEC crude producer in 2025, according to U.S. Energy Information Administration data.
Regional power United Arab Emirates urged Iran and the U.S. on Tuesday to use the resumption of nuclear talks this week to resolve a standoff that has led to mutual threats of air strikes.
Iran, meanwhile, is demanding that talks with the U.S. this week be held in Oman not Turkey, and that the scope be narrowed to two-way talks on nuclear issues only, casting doubt on whether the meeting will go ahead as planned.
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