The March Deadline Can Vienna Technical Talks Avert an $80 Oil Price Shock?

Oil Market Inferno: Global Crude Faces Most Volatile Week in 7 Months Amid US-Iran Deadlock

The last week of February 2026 became the most volatile period in seven months for the global oil market, as geopolitical factors and economic fundamentals diverged drastically.

The negotiations between the United States and Iran in Geneva, which concluded yesterday (February 26th), ended in a "no deal," despite Iran's foreign minister stating "significant progress." The US side expressed disappointment with Iran's proposals.

Iran's proposals included reducing uranium enrichment to 1.5% and pausing the program for several years, but insisting that "they would not export uranium" and "they would not shut down their nuclear facilities."

Trump's ultimatum: The US government insisted on "zero enrichment" and that Iran deliver all its uranium to the US, threatening that March would be the "last chance" before considering military action.

During the negotiations, oil prices surged by more than $1 per barrel after reports that the US insisted on Iran ending uranium enrichment at zero. This resulted in a stalled discussion. However, oil prices softened after Omani mediators indicated progress had been made between the two sides.

Oman's Foreign Minister, Syed Badr al-Busaidi, revealed via the X platform that both sides were preparing to resume negotiations, with technical discussions to be held in Vienna next week.

Brent crude oil prices surged to a seven-month high above $72 per barrel early in the week, amid concerns that the US might attack Iran's nuclear or oil infrastructure.

However, prices were pressured mid-week after reports indicated that US crude oil stockpiles jumped by 16 million barrels, the highest figure in several years, reflecting that industrial demand was not strong enough to support excessively high oil prices.

While the world focuses on negotiations, OPEC+ is set to meet tomorrow (Sunday), with strong rumors suggesting:

The producers are preparing to increase production again by approximately 137,000 barrels per day to regain market share.

Analysts from J.P. Morgan and Morgan Stanley believe that if tensions in the Middle East ease, Oil prices could plummet to $60 as the market clearly enters a "surplus" phase in 2026.

Summary and Key Factors:
Next week (early March) is a crucial "decisive" period:

Technical Talks in Vienna: If technical discussions fail, the market will begin "pricing in," accepting the risk of a full-scale war.

US Deadline: President Trump's threats of military action will be a price premium that could push oil to $80 in an instant if a conflict actually occurs.

While the world is preoccupied with war, the OPEC+ group is facing a dilemma. If they cut production to prop up prices, they will lose market share to the US and Brazil. The decision to increase production by 137,000 barrels per day is a declaration that they "will not tolerate losing market share any longer," even if prices fall.

Analysts point out that Iran currently exports over 1.5 million barrels per day through its "shadow fleet." If the US escalates sanctions or uses military force, this crude oil would disappear from the market immediately, potentially sending global oil prices to $85-$90 within days (supply shock).

The Trump administration has a clear policy of increasing domestic oil production (Drill, Baby, Drill), making the US the world's largest producer. This acts as a crucial "brake," preventing oil prices from skyrocketing like in the past.

J.P. Morgan warns that, if no war actually occurs, the market will focus on the reality that "global oil demand is declining" due to the transition to clean energy and the slowdown of the Chinese economy, which could push oil prices below $60 in the second half of the year.

 

 

Global Oil Surge Geopolitical Risks and U.S. Inventory Plunge Drive Prices to 6-Month Highs.