On February 2, a sharp decline in oil prices occurred on global markets after U.S. President Donald Trump stated that Iran is “seriously negotiating” with Washington.
This is reported by Finway
Decline in Brent and WTI Oil Prices
According to data from Investing, as of 10:44 Kyiv time, the price of Brent crude oil futures fell by $3.47 to $65.85 per barrel. At the same time, West Texas Intermediate futures decreased by $3.43, reaching $61.78 per barrel.
Experts note that this decline was the largest in the past six months within a single day. The main reason for the price drop was the reduced risk of military conflict between the U.S. and Iran following Donald Trump’s comments made last weekend.
Analysts’ Reactions and the Impact of Geopolitics
Previously, the American president had repeatedly threatened Iran with military intervention if it refused to comply with the nuclear agreement or continued its repression of protesters. Analysts point out that these threats in January supported high oil prices.
“The constant threats kept oil prices elevated throughout January,” explained Priyanka Sachdeva, an analyst at Phillip Nova.
On January 31, Donald Trump reiterated to reporters that Iran is in serious negotiations with the U.S., a statement confirmed by Iranian security official Ali Larijani. This news, along with reports of no plans for naval exercises with live fire in the Strait of Hormuz, was interpreted as signs of de-escalation in the region.
According to IG Market analyst Tony Sycamore, such news reduces market risk, leading to a decrease in the so-called “risk premium” that is factored into oil prices. Meanwhile, Capital Economics experts note that geopolitical tensions, including the situation surrounding Iran, still prevent prices from falling further.