Oil prices moved lower on Thursday, giving back part of this week’s gains after a sharp increase in U.S. crude inventories. At the same time, investors are closely watching ongoing U.S.-Iran nuclear talks, which could reshape the geopolitical risk premium in the oil market.
At 07:55 ET (12:55 GMT), Brent crude futures for April delivery fell 1.4% to $69.73 per barrel. West Texas Intermediate (WTI) crude declined 1.9% to $64.17 per barrel. Earlier in the week, both benchmarks had climbed to their highest levels since late July 31.
U.S.-Iran nuclear talks weigh on oil prices
Diplomatic discussions between Washington and Tehran are underway in Geneva. U.S. special envoy Steve Witkoff and Jared Kushner are meeting Iranian officials as the United States seeks an agreement on Iran’s nuclear and ballistic missile programs.
Iranian Foreign Minister Abbas Araqchi stated that a diplomatic solution remains possible if both sides engage constructively. Meanwhile, Ali Shamkhani, a senior adviser to Iran’s supreme leader, indicated that a deal could be reached if negotiations focus strictly on Iran’s commitment not to develop nuclear weapons. He noted that such a framework would align with Iran’s defense doctrine and the supreme leader’s religious edict.
President Donald Trump warned that serious consequences could follow if negotiations fail to produce meaningful progress.
According to analysts at ING, a constructive agreement could lead markets to gradually unwind an estimated $10 per barrel geopolitical risk premium currently embedded in oil prices. However, if talks collapse, upside risks would likely remain. Traders may wait for clarity on the scale of potential U.S. action before reacting fully.
As a major OPEC producer, Iran plays an important role in global oil supply. Any disruption, particularly around the Strait of Hormuz — a key transit route for global crude shipments — would likely push oil prices higher.
On the other hand, de-escalation between the U.S. and Iran could allow weaker supply-demand fundamentals to weigh on prices, especially if OPEC+ proceeds with expected supply increases from April.
U.S. crude inventories surge – EIA data
On the supply side, the latest weekly data from the U.S. Energy Information Administration (EIA) showed a significantly larger-than-expected build in crude stockpiles.
Commercial crude inventories increased by 16 million barrels in the week ended February 20, marking the largest weekly rise in nearly three years and far exceeding market forecasts.
Gasoline inventories declined by approximately 1 million barrels, while distillate stocks rose by about 250,000 barrels. Refinery activity also slowed, contributing to the overall increase in crude inventories.
The combination of rising U.S. stockpiles and ongoing nuclear negotiations has added fresh uncertainty to the oil market outlook, keeping traders focused on both supply fundamentals and geopolitical developments.
