Oil prices slide to $65.98 after hawkish Fed news sparks massive dollar surge

The market’s earlier war premium evaporated as diplomatic talks between the U.S. and Iran resumed

The global energy market entered February 2026 on a “war footing,” but just 72 hours into the month, the narrative has shifted from an imminent military strike to a diplomatic breakthrough. Oil prices extended their decline on Tuesday as investors recalibrated for a world where U.S.-Iran tensions might actually cool, and a hawkish new direction at the Federal Reserve bolsters the U.S. dollar.

The benchmarks exhibited a steady downward trajectory, following a brutal 4 percent sell-off on Monday. Brent Crude Futures declined by 32 cents, or 0.48 percent, settling at $65.98 per barrel. Meanwhile, U.S. West Texas Intermediate (WTI) saw a decrease of 25 cents, or 0.40 percent, bringing its price to $61.90 per barrel.