Global oil markets posted modest gains as traders repositioned ahead of a fresh round of diplomatic engagement between the United States and Iran, with geopolitical risk premiums creeping back into crude benchmarks.
Brent crude futures advanced to $70.83 per barrel, marking a 0.12 percent uptick from the prior session’s close of $70.74. Meanwhile, U.S. benchmark West Texas Intermediate (WTI) settled at $65.51 per barrel, also up 0.12 percent compared to $65.43 recorded previously.
The price movement comes as attention shifts to the third round of indirect nuclear discussions between Washington and Tehran, scheduled to hold in Geneva under the mediation of Oman. Diplomatic sources indicate that the talks are part of renewed efforts to de-escalate tensions surrounding Iran’s nuclear activities and regional security posture.
Heightened Regional Tensions Shape Market Sentiment
Energy markets have remained highly sensitive to geopolitical developments in the Middle East, particularly amid reports of expanded U.S. military deployments across the Persian Gulf and elevated defense readiness in Israel.
Speaking earlier in the week, U.S. Secretary of State Marco Rubio described Iran’s unwillingness to negotiate limitations on its ballistic missile program as “a significant obstacle” to progress. He emphasized that any durable agreement would need to address broader regional security concerns.
U.S. Vice President JD Vance reiterated Washington’s longstanding position that Tehran must not be allowed to acquire nuclear weapons capability. While affirming that diplomacy remains the preferred route, he signaled that alternative measures remain on the table should negotiations falter.
On the Iranian side, Foreign Minister Abbas Araghchi defended the country’s missile arsenal, characterizing it as purely defensive and structured around deterrence doctrine. He dismissed assertions that Tehran is developing intercontinental systems capable of striking the U.S. mainland.
Diplomatic Track Gains Cautious Optimism
Since the resumption of diplomatic engagement last month, the two sides have completed two rounds of indirect negotiations facilitated by Oman. Regional actors, including Türkiye, have also supported de-escalation initiatives aimed at restoring stability to energy corridors and maritime trade routes.
Both delegations described the previous discussions as constructive, noting agreement on preliminary “guiding principles” that could frame a broader accord. Analysts say this cautious optimism has prevented oil prices from experiencing sharper volatility, despite ongoing military maneuvers.
Nonetheless, the strategic backdrop remains tense. Iran’s Islamic Revolutionary Guard Corps recently conducted military exercises, while the U.S. Treasury Department unveiled additional sanctions targeting what it described as Iran’s “shadow fleet” and illicit weapons procurement networks.
Supply-Demand Dynamics Add Counterpressure
While geopolitical risks provided modest upward support, crude prices faced headwinds from fresh U.S. inventory data. Figures released by the Energy Information Administration showed that commercial crude stockpiles surged by approximately 16 million barrels in the week ending February 20 — significantly exceeding market expectations.
The sharp inventory build raised concerns about short-term demand softness in the world’s largest oil-consuming economy. However, a simultaneous drawdown in gasoline inventories suggested that refined fuel consumption remains resilient in certain sectors.
Market strategists note that the interplay between diplomatic developments and macro demand indicators will likely determine the near-term trajectory of oil prices. Should negotiations yield tangible de-escalation signals, risk premiums could moderate. Conversely, any breakdown in talks may inject renewed volatility into global energy markets.
For now, crude benchmarks appear range-bound, reflecting a delicate balance between geopolitical uncertainty and underlying supply-demand fundamentals.
