Trading Update 8th February 2026

Brent Crude Weekly Review – How Politics and Risk Shaped Oil Prices

The global oil market experienced significant turbulence during the first week of February 2026, as Brent crude oil prices traded within a volatile range, driven by a complex interplay of geopolitical tensions and shifting market sentiment. Investors and energy sector analysts observed Brent punching toward the high $60s early in the week, briefly eclipsing the $ 69-per-barrel threshold as risk premiums widened. However, by the close of trade on February 8, 2026, Brent crude had settled near $68 per barrel, reflecting a cautious equilibrium as traders weighed conflicting signals regarding global supply-demand dynamics and diplomatic developments.

This “seesaw” price action underscored a market struggling to reconcile immediate security risks with long-term economic realities. The initial price surges were primarily a response to military and diplomatic escalations that threatened vital supply routes. At the same time, subsequent pullbacks occurred whenever headlines suggested a potential for de-escalation or successful diplomatic intervention. For those engaged in energy trading and volatility-based spread betting, these conditions created a fertile environment for intraday swings rather than sustained linear trends, requiring a sophisticated understanding of the underlying macro drivers.

The Geopolitical Catalysts Driving Oil Volatility

A dominant narrative in energy markets this week was the escalating standoff between the United States and Iran. Sentiment tightened significantly following reports of military friction near the Strait of Hormuz, a critical maritime chokepoint responsible for nearly 20% of the world’s oil flow. When reports surfaced of the US military intercepting Iranian drones and gunboats approaching tankers, crude prices spiked by approximately 2–3% as traders rushed to price in a conflict premium. The fragility of ongoing diplomatic negotiations further heightened this upside risk, as rumours of a collapse in talks suggested that regional stability remained precarious.

Simultaneously, the European Union intensified pressure on Russian energy exports by implementing its 20th sanctions package. These measures specifically targeted the logistics of Russian oil transport, broadening bans on servicing maritime vessels and cracking down on the “shadow fleet” utilised to circumvent previous restrictions. As one of the world’s leading producers, any further degradation of Russia’s adequate export capacity serves as a bullish signal for Brent pricing. Tighter enforcement creates logistical inefficiencies that naturally elevate price floors and increase the complexity of global crude distribution.

The global supply map was further redrawn by India’s strategic pivot away from Russian crude. In an effort to expedite a comprehensive trade agreement with the United States, major Indian refiners reportedly paused new imports of Russian barrels for April delivery. This shift is statistically significant; India had previously been a primary outlet for discounted Russian oil, absorbing over 2 million barrels per day. By diversifying its sourcing toward Western markets, India is altering the traditional flow of oil into Asia, which has profound knock-on effects for global pricing spreads and maritime freight economics.

Market Sentiment: The Tug-of-War Between Supply and Demand

Despite the bullish pressure exerted by geopolitics, broader market fundamentals continue to whisper a note of caution for the remainder of 2026. While conflict risks can trigger immediate “risk-on” price jumps, the overarching outlook remains shadowed by a fragile demand forecast and ample global inventories. Many energy analysts suggest that unless OPEC+ implements significant production adjustments, Brent could face downward pressure if global demand growth—particularly in major manufacturing hubs—falls short of expectations.

This supply-demand friction explains the rapid retracements seen this week. Whenever diplomatic headlines suggested a cooling of tensions, the market quickly pivoted back to these bearish fundamentals, wiping out the gains made during the “fear-driven” spikes. For strategic traders, this highlights the need to overlay real-time news alerts with complex data, such as weekly inventory reports and manufacturing PMI readings, to avoid being caught on the wrong side of a sudden sentiment reversal.

Ripples Through Energy Equities and Sector Performance

The fluctuations in crude prices were mirrored across the equity markets, particularly among integrated energy majors and midstream stocks. BP, for instance, saw its share price come under scrutiny as Brent hovered near psychological support levels. With earnings reports on the horizon, investors are increasingly focused on how lower average crude prices might impact profit forecasts and the long-term viability of aggressive shifts into renewable energy investments.

Refining and midstream sectors also experienced choppiness. While brief upticks in crude prices can occasionally improve short-term margins, the prevailing uncertainty regarding supply consistency and modest demand expectations has dampened overall investor enthusiasm. Stocks with heavy exposure to the Middle East or Russian logistics tended to exhibit higher beta relative to crude, meaning their price movements were more volatile than the oil pits.

Macroeconomic Outlook and Strategic Forecast

As we move deeper into February, several key indicators will determine whether Brent crude can maintain its position in the high $60s or if a slide toward lower support levels is inevitable. Political stability in the Middle East remains the most volatile variable; even the perception of a breakthrough or a breakdown in talks can move the needle by several dollars in a single session. Additionally, the tightening of the “sanctions screw” on Russian exports will continue to create a baseline risk premium, preventing prices from bottoming out entirely.

Looking ahead, traders should prioritise the following data points to shape their medium-term outlook:

• Weekly U.S. crude and gasoline inventory builds or draws.
• Official policy communiqués from OPEC+ regarding output quotas.
• Economic health signals from China, specifically manufacturing and infrastructure data.
• The next wave of corporate guidance from “Big Oil” during the current earnings cycle.

Ultimately, the week ending February 8, 2026, serves as a reminder that while fundamentals eventually anchor the trend, geopolitics will always drive the volatility. Success in the current energy market requires a dual-focus strategy: respecting the intraday fluctuations generated by the headlines while never losing sight of the massive storage and demand signals that dictate the long-term direction of the tape.

Keep an eye on the oil prices here.