WTI crude began the week lower, opening with a bearish gap after reaching about $68.00 last Friday, its highest level since 4 August. It traded above the mid-$65.00s in the Asian session, down over 1.0% on the day, as trade-war fears raised doubts about global growth and fuel use.
On Friday, the US Supreme Court ruled that President Donald Trump lacked authority to impose reciprocal tariffs under the International Emergency Economic Powers Act (IEEPA). Trump then announced a new 15% tariff framework, adding to concerns about weaker fuel demand.
Us Iran Tensions Support Prices
Support came from US-Iran tension ahead of talks in Geneva on Thursday, after Iran submitted a detailed nuclear proposal. Officials described the meeting as a possible last diplomatic window before the Trump administration considers military action, and Iran warned that regional bases and assets could be targets if attacked.
A weaker US Dollar also limited oil’s decline, as crude is priced in dollars. Markets expected the Federal Reserve to hold rates at the next meeting in March, reinforced by hot US inflation data on Friday, while an advance GDP report showed the US economy slowed sharply in the fourth quarter.
We recall how markets reacted back in 2025, when concerns over trade wars and a potential US-Iran conflict created significant volatility, pulling WTI back to the mid-$65 range. Those fears of a broad economic slowdown from tariffs were the primary driver of weakness at the time. The geopolitical risk from Iran was seen more as a potential support, creating a tense balance for traders.
Looking at the market today, February 23, 2026, the environment has shifted from demand fears to supply realities. WTI is currently trading much higher, hovering near $82.50 a barrel, driven by a persistently tight physical market. We have seen OPEC+ maintain its discipline, extending its voluntary production cuts of 2.2 million barrels per day through the first half of this year to support prices.
Inventory Draws Confirm Tight Supply
This supply tightness is confirmed by the latest inventory data. Last week’s Energy Information Administration (EIA) report showed a larger-than-expected draw of 3.1 million barrels, marking the fourth consecutive weekly decline. This trend suggests that despite concerns about economic growth, fuel consumption remains robust enough to keep inventories low.
The broad economic picture has also evolved away from the trade war narrative of 2025. Now, the main concern is sticky inflation, with the latest CPI data for January 2026 still elevated at 3.3%, which complicates the Federal Reserve’s path on interest rates. A weaker US Dollar, however, continues to offer a floor for crude prices, much like it did in the past.
The US-Iran tensions mentioned previously never escalated into a full-scale conflict but have simmered, creating a permanent geopolitical risk premium in the price. Any flare-up in the Middle East is now more likely to cause a sharp spike rather than just provide background support. This underlying risk makes holding short positions particularly dangerous.
For derivative traders, this suggests that buying on dips remains a viable strategy in the coming weeks. Selling out-of-the-money puts to collect premium could be attractive, as the tight supply situation and geopolitical floor are likely to prevent any dramatic price collapse. Volatility is expected to remain, providing opportunities for those positioned for upward price pressure.
