WTI slipped to about $65.00 a barrel in Asian trading on Friday after small gains in the prior session. Prices moved as markets tracked nuclear talks between the US and Iran.
Oil fell after Washington and Tehran agreed to continue negotiations next week, which reduced near-term supply worries. Iranian Foreign Minister Abbas Araqchi said Thursday’s meeting was the most substantive so far and set out Iran’s demands for sanctions relief and a framework to lift restrictions.
Market Focus On Iran Talks
A source familiar with the US position said US officials were disappointed with the outcome. Talks are due to resume after consultations in both capitals, with technical-level meetings scheduled in Vienna next week.
Tehran said it would not allow enriched uranium to leave the country. The US has a large military presence in the Middle East, and President Donald Trump warned of possible military action if no agreement is reached.
Separately, the US reportedly delayed the sale of overseas assets belonging to Russia’s Lukoil. Reuters sources said OFAC will extend the deadline for related transactions from 28 February to 1 April.
We remember this situation well from 2025, when the prospect of a nuclear deal sent WTI tumbling towards $65 a barrel. That price move was based purely on the potential for more Iranian oil, not actual barrels returning to the market. The market was clearly nervous about supply, and any hint of sanctions relief caused an immediate sell-off.
How Traders Can Approach Volatility
Those talks ultimately faltered, and we saw how quickly prices rebounded when the diplomatic path closed and sanctions remained in place. Today, with WTI trading around $82, we can see the high risk premium that is priced in when supply remains tight. Looking back, that dip to $65 was a significant buying opportunity for those who bet against a successful deal.
In the coming weeks, traders should be cautious of similar headline-driven dips, but view them as opportunities. The CBOE Crude Oil Volatility Index (OVX) jumped over 15% during those tense negotiation periods in 2025, creating rich premiums for option sellers. A strategy of selling cash-secured puts on crude futures during any sudden price drops could be effective, allowing us to either collect the premium or acquire a long position at a lower price.
The fundamental picture today is much stronger than it was then. Recent reports from the EIA show U.S. crude inventories have drawn down by over 5 million barrels in the last two weeks, contrary to expectations of a build. This indicates surprisingly robust demand, which provides a solid floor for prices that did not exist during the 2025 diplomatic talks.
Furthermore, OPEC+ has signaled it will maintain its production cuts through the next quarter, keeping the market undersupplied. Unlike last year, the market is now more concerned with a supply deficit than a potential supply glut from Iran. Therefore, any price weakness on renewed talks should be considered temporary unless a concrete, verifiable agreement is announced.
