WTI traded lower on Wednesday at about $65.45, down nearly 1.25%, after US data and OPEC+ supply signals raised oversupply concerns.
US Energy Information Administration figures showed crude oil inventories rose by 15.989 million barrels last week. This reversed a prior 9.014 million barrel draw and was the largest weekly build since February 2023.
Markets Brace For Iran Talks
Markets are also positioning ahead of US-Iran nuclear talks due in Geneva on Thursday. A breakdown could raise the risk of US military action amid a buildup of American forces in the region.
Any escalation could disrupt flows through the Strait of Hormuz and lift WTI. US President Donald Trump said in a State of the Union address on Tuesday that he prefers diplomacy on Iran.
Iran’s Foreign Minister Abbas Araghchi said on Tuesday that Tehran is ready to take steps to reach an agreement with the US.
Reuters reported on Wednesday that Saudi Arabia is increasing oil production and exports as a precaution if a possible US strike on Iran disrupts regional supply.
Opec Plus Supply Signals Shift
Separately, OPEC+ delegates expect modest supply increases to resume at the group’s March 1 meeting. Reuters cited three sources saying the alliance may consider raising output by about 137,000 barrels per day in April.
We remember this period in early 2025 well, as the market was caught between two powerful forces. A massive 16 million barrel surge in US stockpiles was screaming oversupply, pushing prices down toward $65. At the same time, the risk of a breakdown in US-Iran nuclear talks threatened to disrupt the Strait of Hormuz, which kept a floor under the market.
Looking back from today, February 26, 2026, we see how the bearish supply fundamentals eventually won out over the geopolitical fears of that moment. Now, the picture is quite different with WTI trading much higher, near $78 per barrel, primarily because OPEC+ is enforcing production cuts, not signaling increases. This fundamental tightness has created a much more stable price base than we had a year ago.
The US inventory situation is also far more manageable now than it was during the shock we saw in 2025. Last week’s EIA data showed a modest build of 3.7 million barrels, a fraction of the massive jump that sent traders scrambling back then. This suggests that while US production is robust, global demand is absorbing supply more effectively.
The key lesson from last year is how to manage the tension between hard data and sudden geopolitical headlines. Given the current uncertainty around global economic growth, traders should consider using options to define their risk on any positions. Using strategies like collars, which involve buying a protective put and selling a call option, could cap both potential losses and gains in this environment.
Geopolitical risks have also shifted away from the specific Iran nuclear talks that concerned us in early 2025. Today, we are more focused on the persistent shipping disruptions in the Red Sea, which have been adding a steady risk premium to oil prices for months. This contrasts with last year’s situation, where the possibility of a diplomatic breakthrough offered hope for lower risk and more supply.
