Oil prices fell at the close of trading on Thursday, February 26, driven by positive news about the progress of the nuclear talks between the United States and Iran in Geneva, which eased geopolitical concerns.
Brent crude futures fell 10 cents, or 0.14%, to record $70.75 per barrel upon settlement, while US West Texas Intermediate crude fell 21 cents, or 0.32%, to close at $65.21 per barrel.
Bets on avoiding military escalation
Market movements reflect investors’ focus on the possibilities of avoiding a military confrontation in the Middle East, especially since Iran is the third largest oil producer in OPEC, and any disruption in its exports could put strong pressure on global supplies.
An analyst at Fujitomi Securities indicated that the markets are closely following the negotiations, explaining that the outbreak of a limited conflict could push West Texas Intermediate crude temporarily above $70 a barrel, before returning to a range between $60 and $65 if the escalation remains short-term and limited.
New tour in Geneva
US envoy Steve Witkoff and Jared Kushner are scheduled to meet an Iranian delegation in a third round of talks in Geneva, amid mixed signals from both sides.
US President Donald Trump stressed in his State of the Union address that he will not allow Iran to possess a nuclear weapon, while Iranian Foreign Minister Abbas Araqchi stressed that reaching an agreement is “within reach” if diplomacy is given priority.
The risk premium is under test
Analysts believe that the continuation of the positive atmosphere may reduce the geopolitical risk premium that has supported prices recently, while any stumbling in negotiations or possible military escalation is likely to return sharp fluctuations to the global oil market.
