Oil prices fell nearly 5% on Monday, February 2, 2026, and were heading for the steepest single-session decline in more than 6 months, after United States President Donald Trump said Iran was “seriously talking” with Washington.
Brent crude futures were down $3.38, or 4.9%, at $65.94 per barrel at 0528 GMT, while U.S. West Texas Intermediate crude fell $3.33, or 5.1%, to $61.88 per barrel.
Both contracts sank from multi-month highs as risks of a military strike on Iran receded after Trump’s weekend comments.
The slump was also driven by a broader commodities markets sell-off led by deep losses in gold and silver, which analysts partially attributed to a stronger U.S. dollar.
Trump had repeatedly threatened Iran with intervention if it did not agree to a nuclear deal or continued killing protesters.
An analyst at Phillip Nova, Priyanka Sachdeva, said the persistent threats have underpinned oil prices throughout January.
“The recent pullback has also been reinforced by renewed strength in the U.S. dollar, which typically makes dollar-denominated oil more expensive for non-U.S. buyers, further weighing on prices,” Sachdeva said.
Oil prices drop as Trump mulls dialogue with Iran over nuclear deal
On Saturday, Trump told reporters Iran was “seriously talking,” hours after Tehran’s top security official Ali Larijani said arrangements for negotiations were underway.
Trump’s comments, along with reports that the naval forces of Iran’s Revolutionary Guards had no plans for live-fire exercises in the Strait of Hormuz, were signs of de-escalation.
“The crude oil market is interpreting this as an encouraging step back from confrontation, easing the geopolitical risk premium built into the price during last week’s rally and prompting a bout of profit-taking,” IG market analyst Tony Sycamore told Reuters.
At a meeting on Sunday, OPEC+ agreed to keep its oil output unchanged for March. In November, the grouping had frozen further planned increases for January through March 2026 because of seasonally weaker consumption.
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