Oil prices have steadied after facing their first consecutive weekly drop this year, influenced by a risk-off tone in wider markets and growing concerns about a global crude glut. Brent crude, the global benchmark, hovered above $US67 a barrel, following a near 3 per cent decline on Thursday, while West Texas Intermediate traded near $US63. The market is sensitive to geopolitical developments, particularly the ongoing US-Iran nuclear talks.
US President Donald Trump suggested negotiations with Iran could extend for a month, potentially reducing the immediate threat of military action that could disrupt supplies. The US is currently pursuing a diplomatic agreement aimed at curbing Iran’s nuclear ambitions. Concurrently, the International Energy Agency (IEA) reaffirmed projections of a significant global oil glut, estimating over 3.7 million barrels a day in 2026. The IEA’s monthly report indicated that global stockpiles expanded last year at the fastest rate since the 2020 pandemic.
Analysts suggest that tensions between the US and Iran remain a primary driver in oil markets, contributing to price volatility. Zhou Mi, an analyst at a research institute affiliated with Chaos Ternary Futures, noted the ongoing influence of these geopolitical factors. Separately, Venezuela plans to allocate additional oil production land to Chevron and Repsol, potentially boosting supply following US intervention in January.
In related news, Interior Secretary Doug Burgum announced that Washington would sell the country’s oil to China at global prices, in coordination with Venezuela. These developments highlight the complex interplay of geopolitical and economic factors shaping the global oil market and influencing price movements.
