February 23, 2026 – Oil prices fell sharply on Monday. Two forces are driving the drop: fresh U.S. tariff measures and renewed Iran nuclear diplomacy. Both are reshaping the near-term outlook for crude demand and supply.
Price Action: Brent and WTI Both Fall
Brent crude slid to $71.03 a barrel by Monday morning. That is a decline of roughly 1%. U.S. West Texas Intermediate also fell, trading around $65.73. Both benchmarks are now testing key support levels.
Tariff Shock Triggers Risk Aversion
President Trump raised temporary tariffs from 10% to 15% on all U.S. imports over the weekend. The move follows a U.S. Supreme Court ruling that struck down his previous tariff program. Markets reacted quickly.
Gold prices rose. U.S. equity futures dropped. Analysts say oil is caught in the same risk-off wave. Higher tariffs typically slow trade, weaken industrial output, and suppress fuel demand. That is a bearish signal for crude.
Iran Talks Ease Supply Premium
A third round of U.S.-Iran nuclear talks is scheduled for Thursday in Geneva. Oman’s Foreign Minister confirmed the meeting. Iran has signalled it may offer concessions on its nuclear programme in exchange for sanctions relief.
Last week, fears of military conflict pushed Brent and WTI up more than 5%. That geopolitical premium is now unwinding. Traders are pricing in a lower probability of supply disruption from the region.
What Analysts Are Watching
Goldman Sachs expects the global oil market to remain in surplus in 2026. That assumes no major Iranian supply disruption. The bank raised its Q4 2026 Brent forecast to $60 a barrel. WTI was revised to $56, citing lower OECD inventories.
Market direction remains unclear in the short term. Three variables tariff policy, Iran diplomacy, and the Russia-Ukraine conflict are all unresolved. That means oil volatility is not going away soon.
