WTI traded near $65.00 a barrel during Asian hours on Thursday, after dropping 4.9% in the previous session. Prices stayed supported by supply risks tied to US-Iran tensions and stalled Ukraine-Russia talks. US-Iran negotiations remain unresolved. Tehran said there was a “general agreement” on the framework for a possible nuclear deal. US officials said Iran has not met US conditions. US President Donald Trump said military action is still possible, and reports suggest it could turn into a long campaign.

Geopolitical Risks Support Prices

Reuters reported that two days of peace talks in Geneva between Ukraine and Russia ended with no progress. Ukrainian President Volodymyr Zelenskiy said Russia is delaying US-led efforts to end the four-year war. Meanwhile, Russian forces kept striking energy infrastructure and continued advancing on the battlefield. In trade flows, India’s state-run Bharat Petroleum Corporation Limited bought Venezuelan crude for the first time. HPCL Mittal Energy Limited also bought Venezuelan cargoes for the first time in two years, Reuters reported, citing sources. The American Petroleum Institute said US weekly crude stocks fell by 0.609 million barrels last week. This partly offset the previous week’s 13.4 million-barrel increase, the largest build since January 2023. Earlier last year, WTI held near $65 a barrel mainly because of major supply risks. US-Iran tensions were high, and the war in Ukraine showed no clear path to ending. This helped put a floor under prices, even as inventory data moved around. Since then, the market has continued to price in a baseline level of geopolitical risk. In the second half of 2025, prices strengthened after OPEC+ signaled it would cut output more aggressively to defend the $70 level. That helped push WTI into a $75–$80 range for several months. Risks linked to Iran and Russia did not disappear, but attention shifted toward OPEC+ supply discipline. This showed up in lower global inventories in Q3 and Q4 reports last year.

Demand Signals Challenge The Bull Case

Now, in February 2026, that story is being tested by new concerns about global demand. China’s latest manufacturing PMI came in at 49.2, below 50, which marks the line between growth and contraction. This raises worries about a slowdown in the world’s largest oil importer. It also raises the question of whether OPEC+ cuts can offset a real drop in consumption. This week’s Energy Information Administration (EIA) report supports a more cautious view. It showed a surprise crude inventory build of 4.2 million barrels, despite expectations for a small draw. This is the third straight weekly build, which suggests supply may be rising faster than demand in the near term. That is very different from the large drawdowns seen late last year. In the weeks ahead, the push and pull between weaker demand signals and geopolitical supply risks could drive higher volatility. Strategies that benefit from large price moves, such as buying straddles or strangles, may help capture that uncertainty. Selling short-dated call options with strikes above $80 could also generate income, if demand concerns limit rallies. Create your live VT Markets account and start trading now.

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