Oil drops more than 1% on US stockpiles, with US-Iran talks also in focus

By Enes Tunagur

Thu, February 26, 2026 at 10:00 PM GMT+9 2 min read

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-2.02%

By Enes Tunagur

LONDON, Feb 26 (Reuters) - Oil prices fell on Thursday after the biggest jump in U.S. crude inventories in three years, with signs of weakness in ‌the physical oil market also weighing on prices, while traders assess the supply ‌implications arising from U.S.-Iran talks.

Brent crude futures were down $1.05, or 1.5%, at $69.80 a barrel by 1235 GMT. WTI futures ​lost $1.26, or 1.9%, to $64.16.

U.S. crude inventories rose by 16 million barrels last week, Energy Information Administration data showed on Wednesday. [EIA/S]

Weakness in the North Sea physical oil market is also weighing on oil prices, said UBS analyst Giovanni Staunovo, adding that markets would focus on the outcome of Thursday’s third ‌round of U.S.-Iran talks.

The North Sea ⁠physical market underpins the Brent futures contract, prices of which have advanced by about 15% so far this year as potential military conflict between ⁠the U.S. and Iran has outweighed expectations of oversupply.

U.S. envoy Steve Witkoff and Jared Kushner are due to meet an Iranian delegation in Geneva on Thursday.

Also on the supply side, Saudi Arabia is ​boosting oil ​production and exports in a contingency plan should ​any U.S. strike on Iran disrupt ‌supplies from the Middle East, two sources familiar with the plan said on Wednesday.

OPEC+, which groups members of the Organization of the Petroleum Exporting Countries and allies including Russia, is likely to consider raising oil output by 137,000 barrels per day in April, three sources with knowledge of OPEC+ thinking said as the group prepares for peak summer demand while prices remain strong.

Brent ‌rose on Monday to its highest since July 31 ​as Washington positioned military forces in the Middle East ​to press Iran to negotiate an end ​to its nuclear and ballistic missile programme.

An extended conflict could disrupt supplies ‌from Iran, OPEC’s third-biggest crude producer, and ​other Middle East exporters.

“The ​outcome of U.S.-Iran nuclear talks today will be key to the direction of oil prices,” ING analysts said in a note.

“A constructive resolution would likely prompt the market ​to gradually unwind as much as ‌a $10 per barrel risk premium, which we believe is currently priced in.”

(Reporting by ​Enes Tunagur in LondonAdditional reporting by Yuka Obayashi in Tokyo and Emily Chow ​in SingaporeEditing by Emelia Sithole-Matarise and David Goodman)

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