Crude Oil Declines as US And Iran Prepare for Talks

Crude oil prices fell on Thursday following confirmation that the United States and Iran would hold talks in Oman on Friday. The decline came despite disagreements over the meeting agenda, occurring at a time of heightened tensions due to increased US military presence in the Middle East.

Oil markets had surged a day earlier on fears the talks might collapse, but sentiment later stabilised as negotiations appeared more likely to proceed. The shifting geopolitical backdrop contributed to rapid price fluctuations across global oil benchmarks.

Talks Between US And Iran Shape Oil Market Sentiment

The planned discussions in Oman prompted significant market attention, especially given earlier uncertainty around whether both parties would participate. The United States and Iran reportedly differed on what should be included on the agenda, highlighting longstanding diplomatic challenges.

Despite this, confirmation that the meeting would take place eased immediate concerns about an escalation in regional tensions. This shift in expectations contributed to the cooling of oil prices after Wednesday’s sharp rise of about 3%.

Issues Expected to Influence the Oman Meeting

Iran seeks to focus the talks on its longstanding nuclear dispute with Western nations, which has remained a central point of contention for years. The United States, however, aims to broaden the agenda to include Iran’s ballistic missile capabilities, its support for armed proxy groups in the Middle East, and domestic human rights concerns.

Each of these topics has historically complicated diplomatic progress between the two countries. The inclusion of multiple sensitive issues increases the stakes of the meeting for both regional stability and global energy markets.

Geopolitical Tensions and Their Impact on Oil Prices

Tensions between Washington and Tehran have been elevated for months, amplified by US President Donald Trump’s threat to strike Iran, an OPEC member state. Such rhetoric has raised fears of a wider regional conflict, particularly given the Middle East’s role as a critical source of global oil supply.

Concerns intensified on Wednesday after reports suggested the talks might fail, contributing to a 3% spike in oil prices. As expectations stabilised on Thursday, however, WTI fell 1% to $64.5 per barrel at 2347 GMT, reflecting reduced anxiety over an immediate breakdown in negotiations.

Read More: GIFT Nifty Up 0.09% on Feb 5, 2026.

Conclusion

WTI crude prices declined on Thursday as confirmation of US–Iran talks reduced fears of escalation that had previously driven a sharp price increase. The planned meeting in Oman, though marked by disagreements, shifted market sentiment by lowering expectations of immediate confrontation.

Broader geopolitical issues and a stronger dollar added to the downward pressure on oil benchmarks. The developments underscore how diplomatic signals and currency movements continue to play a central role in shaping global energy prices.

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