LONDON — Oil prices fell in early trading Monday after Oman-mediated talks between the United States and Iran eased fears that escalating tensions could threaten crude supply from the Middle East. The pullback reflected traders trimming a geopolitical risk premium that had built up around the possibility of disruptions in the Persian Gulf, Feb. 9, 2026.
By midmorning, benchmarks had clawed back much of the drop. Brent crude futures were up 17 cents, or 0.3%, at $68.22 a barrel, while U.S. West Texas Intermediate was up 18 cents, or 0.3%, at $63.73, after dipping earlier in the session, according to a Reuters report tracking Monday’s trade.
The week-to-week move has been more pronounced: Brent and WTI fell more than 3% and 2%, respectively, last week, their first decline in seven weeks, as markets took comfort in the renewed diplomatic channel and a broader risk-off move in equities.
Oil prices retreat as the Iran risk premium fades
Monday’s slide in oil prices came as both governments signaled they would keep talking after what they described as constructive discussions. In crude markets, even small shifts in perceived escalation risk can move prices quickly because traders build a “war premium” into contracts tied to supply routes near Iran.
That premium is not gone. Iran’s foreign minister warned Tehran would strike U.S. bases in the Middle East if attacked, and analysts cautioned that U.S. naval deployments keep a floor under the risk narrative. “The Iranian risk premium cannot be fully defused as long as U.S. warships are located where they are,” SEB analyst Bjarne Schieldrop told Reuters.
Oman talks and what comes next for oil prices
Diplomacy now turns to the timing and scope of the next round. Ali Larijani, an adviser to Iran’s Supreme Leader and secretary of Iran’s national security council, is expected to visit Oman on Tuesday following the latest indirect talks, Reuters reported, while Tehran and Washington remain split over issues including uranium enrichment and whether Iran’s ballistic missile program is part of any negotiation.
Signs of reduced confrontation risk also showed up beyond crude. Regional equities in the Gulf edged higher as investor anxiety eased, according to a separate Reuters market report on Gulf stocks.
A familiar swing for oil prices
The pattern is well-established: oil prices often spike when Washington and Tehran clash, and fall back when de-escalation signals appear. In January 2020, for example, Reuters documented a sharp jump in crude after the U.S. killed Iranian commander Qassem Soleimani, underscoring how quickly geopolitical events can reprice supply risk.
Underlying that sensitivity is geography. The Strait of Hormuz sits between Oman and Iran, and the U.S. Energy Information Administration has described it as a critical chokepoint with limited alternatives; in 2024, flows through the strait averaged about 20 million barrels per day, roughly 20% of global petroleum liquids consumption, according to an EIA analysis published in 2025.
For now, traders say oil prices will hinge on whether the Oman channel produces another round quickly — and whether rhetoric on both sides stays contained — even as other forces, including shifting trade in Russian crude, complicate the supply picture.
