Oil Prices Fall Over 5% as US-Iran Talks Ease Fears of Supply Disruption

Oil prices fell sharply on February 2 as easing US-Iran tensions reduced supply disruption fears. Crude oil dropped to $62.24/barrel. WTI and Brent slid over 5%. No military drills in Strait of Hormuz and steady OPEC+ output pushed prices lower.

Oil prices slide sharply as US-Iran talks ease supply fears

Crude oil prices fell sharply on February 2, 2026, as global markets reacted to easing geopolitical tensions. Crude oil dropped to $62.24 per barrel, down 4.56 percent from the previous day. The price move was tracked through a contract for difference (CFD) that follows the global benchmark market.

Despite the sharp daily fall, crude oil prices are still 6.71 percent higher over the past month. However, prices remain 14.93 percent lower than a year ago, showing that the market is still under pressure over the longer term.

Recent highs and long-term price movement

Historically, crude oil reached an all-time high of $410.45 per barrel in December 2025. Since then, prices have fallen significantly as supply fears eased and demand concerns returned.

The latest price data and charts were last updated on February 2, 2026.

WTI crude falls as US-Iran tensions cool

West Texas Intermediate (WTI) crude oil futures fell by more than 5 percent, slipping below $62 per barrel on Monday. The fall came after prices had touched multi-month highs in January.

Traders are closely watching talks between the United States and Iran, which could lower the risk of supply disruptions in the Middle East. US President Donald Trump said on Saturday that Iran was “seriously talking” with Washington. This came after Iran signalled that arrangements for talks were moving forward.

Signs of de-escalation calm markets

Signs of easing tensions helped push prices lower. Reports said that Iran's Revolutionary Guards naval forces do not plan to hold live-fire exercises in the Strait of Hormuz, a key shipping route for global oil supplies.

Any military activity in this narrow waterway often raises fears of supply shocks. The absence of such exercises helped calm the market.

OPEC+ keeps production steady

Adding to the downward pressure, OPEC+ reaffirmed its decision to keep oil output unchanged in March. March is the final month of the group’s three-month supply pause. The decision signalled no immediate tightening of supply.

Brent crude also slides

According to Bloomberg report, Brent crude prices plunged more than 5 percent at one point and were trading near $66 per barrel. US crude futures also fell sharply during the session.

US President Trump played down threats made by Iran’s supreme leader Ayatollah Ali Khamenei over the weekend. He repeated that he remains hopeful a deal can be reached.

Iran’s foreign ministry said it hopes diplomacy will prevent war. The Tasnim news agency reported that talks between Iran and the US may take place in the coming days.

Market sees pullback, not panic

Market experts said the fall looks like a reset rather than a major shift. Haris Khurshid, chief investment officer at Karobaar Capital LP, said oil prices are giving back the extra risk premium.

“With no new supply shock, oil is adjusting after fears of disruption did not happen,” he said.

Weeks of tension had pushed prices higher

Oil prices had risen sharply in January due to rising tensions between the two countries. Trump had repeatedly warned Iran of possible intervention if it did not stop the killing of protesters or agree to a nuclear deal. In response, Tehran warned of retaliation, raising fears of conflict.

These threats added a risk premium to oil prices, as traders feared disruptions to global oil supply.