Oil prices dropped on Thursday as markets reacted to an unexpected rise in US crude inventories and growing optimism surrounding renewed nuclear negotiations between the United States and Iran.
International benchmark Brent crude fell by approximately 2.4% to $63.93 per barrel, down from the previous session’s close of $65.49. Meanwhile, US benchmark West Texas Intermediate (WTI) declined about 2.7%, settling at $60.80 per barrel from $62.43.
The decline followed a report from the US Energy Information Administration (EIA), which revealed that commercial crude oil inventories increased by 3.5 million barrels last week, reaching 441.8 million barrels. Analysts had anticipated a drawdown of around 2 million barrels, and the unexpected stockpile has raised concerns about weakening demand and a potential supply glut in the world’s largest oil consumer.
Oil markets were also influenced by diplomatic developments, as the US signaled progress in talks with Iran aimed at reviving the nuclear agreement. A deal could lead to the lifting of sanctions on Iranian oil exports, increasing global supply and pressuring prices further.
During a diplomatic visit to the Gulf, US President Donald Trump expressed optimism about reaching a peaceful resolution with Iran. Speaking in Qatar, he said, “We’re not going to be making any nuclear dust in Iran. I think we’re getting close to maybe doing a deal without having to do this,” referencing the possibility of military intervention.
The Trump administration has reportedly engaged in four rounds of discussions with Iran, seeking to avoid a potential Israeli strike on Tehran’s nuclear facilities. The US State Department also announced fresh sanctions on Chinese and Hong Kong-based entities accused of supporting Iran’s ballistic missile program, signaling continued pressure alongside diplomatic engagement.
Energy prices had remained elevated in recent months due to tightening supply stemming from sanctions on Russia and instability in the Middle East. However, weaker-than-expected economic performance in China has weighed on global demand, contributing to the recent downward trend.
Amid these dynamics, sources suggest the US government is aiming to stabilize oil prices within the $40 to $50 per barrel range, alongside lower interest rates, to support domestic economic recovery.
