Oil Dips as Traders Focus on US-Iran Nuclear Talks in Geneva

Yongchang Chin and Alex Longley

Thu, February 26, 2026 at 6:55 PM GMT+9 2 min read

(Bloomberg) — Oil edged lower as nuclear talks take place between the US and Iran, with some major Middle Eastern producers boosting exports as concerns about a potential conflict in the region create uncertainty about future supply.

Brent (BZ=F) traded around $70 a barrel following a two-day decline, while West Texas Intermediate was near $65. The US and Iran began a third round of nuclear talks Thursday, with just days to go until President Donald Trump’s deadline to strike a deal. Iran entered the meeting saying it had a reasonable amount of flexibility in the negotiations.

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Oil has been caught between bearishness from widespread expectations for a global glut this year and heightened geopolitical concerns over Iran.

On Thursday, signs of a softer market reared their head as a key gauge in the Brent futures market signaled oversupply for the first time outside of an expiry day since 2024. Equivalent markers for later months were in a bullish backwardation structure.

“The surplus really seems to be mild oversupply so far — not a genuine overwhelming glut,” Rabobank analysts Joe DeLaura and Florence Schmit wrote in a note. “We currently see a very high chance that the US strikes at Iran.”

Trump said he preferred a diplomatic solution regarding Iran’s nuclear program, but he warned of consequences if no deal is agreed. The US has imposed new sanctions on over 30 entities supporting Iranian oil and weapons sales, ramping up of pressure on Tehran before talks.

“The options market is telling you right now that investors are very hedged for a more challenging outcome in Iran,” says Julian Emanuel, chief equity and quantitative strategist at Evercore ISI.Source: Bloomberg

As tensions simmer in the Middle East, Saudi Arabia is on course to export the most crude in almost three years this month, while Iran has been rapidly filling up tankers in recent days. Combined flows from Iraq, Kuwait and the United Arab Emirates are also higher.

The market will be keenly watching for the outcome of a scheduled OPEC+ meeting on Sunday to decide supply policy for April. Some delegates expect a modest production increase, but one official said the outlook was unclear as conflict risks between the US and Iran cloud the outlook.

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