Crude oil prices dipped slightly on Tuesday in quiet trading, but they stayed within February’s range. The US benchmark WTI eased from Monday’s $63.70 high and was holding above $63.00 at the time of writing.
With many Asian markets closed for the Lunar New Year and the US returning from a long weekend, trading volumes were low. Focus stayed on US–Iran talks, set to resume in Geneva later on Tuesday.
Market Focus Shifts
US President Donald Trump said he would take part “indirectly” in the talks. Iran’s foreign minister said the US position on the nuclear issue had moved to a “more realistic” one.
The US has sent aircraft carriers to the Arabian Sea, showing that military action is still an option. Separately, Reuters reported that OPEC+ members are discussing a return to output increases from April, as they expect global demand to rise during the western summer.
Oil markets still face a familiar push and pull, even if the details have changed from a year ago. At this time in 2025, WTI was trading calmly around $63 a barrel and most attention was on the US–Iran talks. Now, with WTI near $84.50, the market is focused on supply chain security and stronger-than-expected global demand.
Last year, the chance that OPEC+ would raise output for the summer helped cap prices. Now, in February 2026, the group is keeping a tight grip on production even though the latest EIA report shows fourth-quarter demand beat forecasts by almost 400,000 barrels a day. This tighter supply is a key difference from early 2025 and it supports today’s prices.
Options And Volatility
In February 2025, the calm and range-bound market made selling volatility look attractive. Now, the CBOE Crude Oil Volatility Index is higher, near 42, as traders worry about possible disruption in the Strait of Hormuz. That supports considering option-buying strategies, such as straddles or strangles, which can benefit from a large move in either direction over the next few weeks.
Last year, the main trigger was the outcome of the Geneva talks. The near-term catalysts are different now. We are watching the OPEC+ technical meeting in early March for any change in production guidance. A flare-up in maritime tensions in the Arabian Sea could also spark a sudden price jump, which may make defensive long call positions appealing.
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