Oil Threatened, Iran Premium Begins to Fade
Oil prices are headed for their first consecutive weekly decline this year, weighed down by risk-off sentiment in global markets, concerns about a crude oversupply, and the possibility of prolonged US-Iran nuclear talks. Brent, the global benchmark, held above $67/barrel after plunging nearly 3% on Thursday, while WTI hovered around $63/barrel. Meanwhile, Asian stocks also weakened on Friday after losses spread across Wall Street and commodities.
From a geopolitical perspective, US President Donald Trump said negotiations with Iran could take up to a month. This statement reduced the likelihood of imminent military action, which typically triggers price spikes, as the market temporarily assessed a lower risk of supply disruptions from the Middle East. Washington's current focus is said to remain on diplomatic channels to curb Iran's nuclear ambitions, so the "risk premium" that had previously boosted oil prices is starting to fade.
Fundamental pressure comes from a report by the International Energy Agency (IEA) that reiterated the market's potential for a surplus of slightly over 3.7 million barrels per day by 2026—a figure that could be a record on an annual average. The IEA also added that global inventories rose last year at the fastest pace since the 2020 pandemic. The combination of projected surpluses and rapidly growing inventories further limits the room for an oil rally as global sentiment worsens.
This consecutive weekly decline also risks breaking the winning streak that occurred in early 2026, which was previously supported by episodes of geopolitical tension, including the US-Iran "tug-of-war." At an energy conference in London this week, several industry players assessed that global supply has the potential to outpace demand this year, which could drive inventory accumulation, particularly in the Atlantic region, a region often used as a reference for global price formation. (asd)
Source: Newsmaker.id
