West Texas Intermediate (WTI) crude trades near $65.50 per barrel during Thursday’s European session, stabilizing after two consecutive sessions of decline. Oil prices remain supported by persistent geopolitical tensions between the United States and Iran, which continue to fuel concerns about potential supply disruptions.
Investors are closely watching the third round of US-Iran nuclear negotiations taking place in Geneva. US President Donald Trump has recently cautioned that military action remains an option should diplomatic efforts fail. In response, Iran warned that American military bases across the Middle East could become legitimate targets in the event of escalation, heightening fears of a broader regional conflict.
Analysts cited by Reuters note that the outcome of these discussions could significantly influence crude prices. A positive breakthrough may result in a gradual removal of the roughly $10 per barrel geopolitical risk premium currently embedded in the market.
Despite geopolitical support, upside momentum remains limited due to mounting oversupply concerns. Data from the Energy Information Administration (EIA) revealed that US crude inventories jumped by 15.989 million barrels last week — the largest weekly increase since February 2023 — following a prior draw of 9.014 million barrels. Additional pressure comes as Saudi Arabia approaches its highest crude export levels in nearly three years, while Iran continues to ramp up tanker shipments.
On the policy front, the US Treasury Department announced plans to allow companies to apply for licenses to resell Venezuelan oil to Cuba’s private sector. The move could help ease fuel shortages on the island, though its broader market impact remains limited for now.
