Oil Prices Steady as US-Iran Nuclear Talks and Rising Crude Inventories Shape Market Outlook

Oil prices held steady during Asian trading on Thursday as investors closely monitored the third round of U.S.-Iran nuclear talks, a key event that could influence the near-term direction of global crude markets. Brent crude futures for April delivery rose 0.3% to $71.03 per barrel, while West Texas Intermediate (WTI) crude gained 0.2% to trade at $65.55 per barrel.

Market participants are focused on high-level discussions in Geneva, where U.S. officials, including special envoy Steve Witkoff and Jared Kushner, are meeting Iranian representatives to address Tehran’s nuclear and ballistic missile programs. Iranian Foreign Minister Abbas Araqchi has indicated that a diplomatic solution remains possible if both sides engage constructively. Meanwhile, President Donald Trump warned that failure to make meaningful progress could lead to serious consequences.

Analysts note that oil prices currently reflect a geopolitical risk premium of up to $10 per barrel due to tensions between Washington and Tehran. A breakthrough in negotiations could ease supply concerns and trigger a gradual pullback in crude prices. Conversely, if talks collapse, oil markets may see renewed volatility, particularly if potential U.S. action against Iran disrupts supply.

Iran, a major OPEC producer, plays a significant role in global oil supply. Any disruption, especially around the strategic Strait of Hormuz—a critical transit route for global oil shipments—could drive prices higher. However, easing tensions combined with weaker demand fundamentals and a potential OPEC+ decision to increase output from April could pressure prices lower.

Adding to supply-side concerns, the U.S. Energy Information Administration reported a surprise build of 16 million barrels in commercial crude inventories for the week ending Feb. 20, the largest increase in nearly three years. Gasoline inventories declined by 1 million barrels, while distillate stocks rose modestly. Lower refinery activity also contributed to the sharp crude stockpile increase, reinforcing mixed signals in the oil market.