London, Feb 25, 2026, 19:22 (GMT) — Regular session.
Brent crude futures edged down on Wednesday, pressured by a U.S. government report showing crude inventories jumped much more than markets expected, dampening appetite sparked by Middle East tensions. Brent dropped 12 cents to $70.65 a barrel as of 1607 GMT. U.S. West Texas Intermediate slipped 26 cents, settling at $65.37. The Energy Information Administration posted a 16 million-barrel increase—analysts had looked for just 1.5 million. UBS’s Giovanni Staunovo called the data “a bearish report,” though he noted the hit to prices was muted. Reuters
Crude’s price has included a geopolitical risk premium lately—traders are factoring in potential supply threats as the U.S. keeps up the squeeze on Tehran. Brent lost 1% Tuesday, closing at $70.77, after Iran signaled it was open to progress on a nuclear agreement ahead of Thursday’s Geneva talks.
Demand worries were already running high, with tariffs remaining tough to pin down and clouding the outlook. Brent finished Monday at $71.49. Phil Flynn of Price Futures Group noted Iran “looked more open to talking about their nuclear program,” but stressed that attack risks haven’t eased. “Tariffs are going to be a disaster for the near future,” warned Bob Yawger, energy futures director at Mizuho. Reuters
Right now, it’s a lopsided tape—heavy U.S. inventory build weighs on one end, Middle East risk bid props up the other. No clear winner yet.
Saudi Arabia has been ramping up both output and exports, acting on contingency plans in case a potential U.S. strike on Iran throws Middle East supplies into chaos, according to two people with knowledge of the situation. The Strait of Hormuz sees more than 20 million barrels a day of crude, condensate and fuels moving through. If disruptions don’t materialize, the kingdom is expected to scale back to stay inside its OPEC+ limits.
OPEC+, which brings together the Organization of the Petroleum Exporting Countries and partners like Russia, is weighing a possible output hike of 137,000 barrels per day for April, according to three sources. The group’s eight-member panel meets March 1. Brent crude has hovered close to $71 a barrel, just under the seven-month peak of $72.50 reached earlier this week, Reuters said.
On Wednesday, Washington tightened its stance on Iran, rolling out new sanctions that hit over 30 people, companies, and vessels connected to the country’s oil and weapons sectors, according to the U.S. Treasury. The measures flagged a dozen “shadow fleet” vessels—older ships shuffling sanctioned oil through obscure channels. Treasury Secretary Scott Bessent accused Iran of “exploiting financial systems to sell illicit oil.” Reuters
Traders are debating if this stock build is just a blip related to imports and refinery activity, or if it signals something trickier ahead. That eye-catching “adjustment” figure in the EIA report isn’t doing sentiment any favors, either.
The downside? Simple enough: should diplomacy ease tensions in the Gulf and stockpiles keep piling up, that risk premium could vanish in a hurry. On the flip side, it doesn’t take much—a snag in negotiations or any whiff of trouble near Hormuz—and prices can jump sharply, regardless of what’s happening with actual supply and demand.
Thursday brings the Geneva sit-down between U.S. and Iranian officials, where traders are scanning for any hint of movement in the deadlock. Iran’s President Masoud Pezeshkian described “a good outlook” ahead of the discussions, while Foreign Minister Abbas Araqchi suggested a deal was “within reach” if diplomatic channels take center stage. Reuters
