Oil Market Retreats: US-Iran Oman Talks Trim Geopolitical Risk Premium.

Oil prices witnessed a significant decline on Thursday, February 5, 2026, reversing previous gains as geopolitical tensions eased following the confirmation of upcoming talks between the US and Iran in Oman. The news that both nations will sit at the table—albeit indirectly—has significantly reduced fears of immediate supply disruptions from the Middle East.

Market Reaction: A Sharp Pullback

The “geopolitical risk premium” that had bolstered prices throughout January began to fade:

• Brent Crude: Futures dropped by 1.89% to settle at $68.15 per barrel.
• WTI Crude: Fell 1.90% to $63.90, pulling back from earlier highs.
• Volatility Reversal: This decline follows a 3% surge on Wednesday, triggered by rumors that the diplomatic track might collapse.

The Oman Agenda: Nuclear vs. Regional Stability

The talks, held in Muscat, feature high-level representatives including Iranian Foreign Minister Abbas Araghchi and US special envoy Steve Witkoff, with reports suggesting Jared Kushner is also involved.

• Iran’s Stance: Tehran insists on limiting discussions strictly to its nuclear program and the lifting of sanctions.
• US Objectives: The Trump administration seeks a broader deal that includes limits on Iran’s ballistic missiles and its support for regional proxy groups.