Geopolitics Cools, Oil Investors Abandon Oil
Oil prices fell sharply again on Monday (February 2nd) as the previously attached "war premium" began to evaporate. The main trigger came from Donald Trump's statement that Washington was communicating with Iran—causing the market to interpret the situation as a sign of de-escalation, not confrontation.
Latest prices: Brent (April contract) was last in the range of $65.9–$66.1 per barrel, while WTI (March contract) was around $61.8–$62.0 per barrel.
Trump also downplayed Ayatollah Ali Khamenei's warnings of a "regional war" and reiterated his hope for a deal. From Tehran's side, the Iranian Foreign Ministry stated that diplomacy was being pursued to prevent war, and the Tasnim News Agency reported that US-Iran talks were likely to take place in the next few days.
The pressure on oil was also fueled by broader commodity selling sentiment. After gold and silver briefly plunged sharply, risk-off sentiment spread to other commodity assets—making oil's decline feel deeper than just a geopolitical headline.
This correction occurred just after oil posted its biggest monthly gain since early 2022. January was tense as the market quickly priced in the risk of supply disruptions, but once tensions eased, focus returned to the "big story" of 2026: relatively high global supply, especially in the first half of the year.
In other words, the market is resetting: from "fear of supply disruptions" mode to "rechecking fundamentals" mode. As long as there are no new surprises from the Middle East, oil movements will remain sensitive—easily falling when the risk premium fades, and easily surging again if geopolitical headlines heat up again.
Source: Newsmaker.id
