Oil Prices Fall as Middle East Tensions Ease and Supply Risks Fade
Oil prices declined on Monday as easing tensions in the Middle East reduced the risk of supply disruptions. Brent crude fell below $68 per barrel after losing nearly 4% last week, while West Texas Intermediate (WTI) traded near $63.
The price drop follows positive signs from diplomatic talks. On Friday, the US and Iran met in Oman to discuss the Islamic Republic’s nuclear program. Tehran described the meeting as a “step forward.” With US military forces already stationed in the region, President Donald Trump announced that another meeting is planned for early this week.
President Trump is also scheduled to meet with Israeli Prime Minister Benjamin Netanyahu on February 11. At the same time, the US is preparing a new package of tariffs targeting countries that continue to do business with Iran.
Market Trends and Global Supply
Oil prices have generally trended higher since the start of 2026, despite concerns about a global oversupply. These gains were driven by geopolitical conflicts and temporary shutdowns, such as those in Kazakhstan. However, last week’s progress between the US and Iran signaled to traders that military intervention is less likely in the near term, leading to lower prices.
The Focus on India and Russian Oil
Investors are also closely watching oil flows to India. President Trump recently stated that India has agreed to stop importing Russian crude as part of a new trade deal. In exchange, the US has removed certain punitive tariffs on Indian goods.
While New Delhi has not yet officially confirmed this commitment, the Indian government has emphasized that its top priority is maintaining national energy security. Reports suggest that Indian refiners have already begun scaling back their purchases of Russian oil.
Key Reports to Watch This Week
This week will provide more clarity on the global oil market. Several major organizations are scheduled to release their updated market analyses:
- EIA: Short-Term Energy Outlook (Tuesday)
- OPEC: Monthly Oil Market Report (Wednesday)
- IEA: Monthly Oil Market Report (Thursday)
Additionally, industry leaders are gathering in London for International Energy Week, where speakers like Vitol Group CEO Russell Hardy will discuss the future of global energy.
Trader Sentiment and Current Prices
Before the latest round of US-Iran talks, many traders had bet that oil prices would rise. In fact, hedge funds were at their most bullish on Brent crude since last April. However, that sentiment has shifted as diplomacy takes center stage.
Current Market Prices:
- Brent Crude (April): Down 0.6% to $67.62 per barrel.
- WTI Crude (March): Down 0.4% to $63.17 per barrel.
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