U.S. Crude Stock Surge Sends Oil Prices Down: What It Means for Investors and Businesses in Oman
LONDON — Oil prices declined on Thursday amid a significant rise in U.S. crude inventories and signs of weakness in the physical oil market, which dampened market sentiment. Traders are closely monitoring ongoing U.S.-Iran negotiations that could potentially prevent a military conflict threatening oil supplies.
At 1021 GMT, Brent crude futures were down 82 cents, or 1.16%, at $70.03 per barrel. Meanwhile, U.S. West Texas Intermediate (WTI) crude fell 79 cents, or 1.2%, to $64.63 per barrel.
The U.S. Energy Information Administration reported a substantial increase of 16 million barrels in U.S. crude inventories last week—the largest buildup in three years.
UBS analyst Giovanni Staunovo highlighted that weakness in the North Sea physical oil market, which supports Brent futures, is also exerting downward pressure on prices. Market attention is now focused on the third round of U.S.-Iran talks scheduled for Thursday.
Despite these recent declines, oil futures have risen about 15% in 2026 so far, driven by concerns over a potential U.S.-Iran confrontation that have counterbalanced expectations of oversupply.
Traders noted that U.S. envoy Steve Witkoff and Jared Kushner are set to meet with an Iranian delegation in Geneva as part of the diplomatic efforts.
On the supply side, Saudi Arabia is increasing oil production and exports under a contingency plan designed to mitigate any supply disruptions caused by a possible U.S. strike on Iran, according to two sources familiar with the plan.
Additionally, OPEC+—which includes OPEC members and allies such as Russia—is expected to consider raising output by 137,000 barrels per day in April. This move aims to prepare for peak summer demand and capitalize on any price increases prompted by heightened U.S.-Iran tensions, according to three sources.
Oil prices had reached their highest level since July 31 on Monday, amid U.S. military deployments in the Middle East intended to pressure Iran into negotiating an end to its nuclear and ballistic missile programs. An extended conflict could disrupt supplies not only from Iran, OPEC’s third-largest producer, but also from other Middle Eastern exporters.
ING analysts emphasized that the outcome of Thursday’s talks will be crucial for oil prices. A positive resolution could lead the market to shed up to $10 per barrel of the risk premium that is currently factored into prices.
— Reuters
Special Analysis by Omanet | Navigate Oman’s Market
The recent dip in oil prices, driven by soaring U.S. crude inventories and fragile physical markets, underscores the volatile nature of global oil dynamics amid geopolitical tensions. For Omani businesses and investors, this volatility presents a dual opportunity: capitalize on potential supply disruptions for higher returns while preparing for price corrections if U.S.-Iran negotiations succeed. Smart investors should closely monitor geopolitical developments and OPEC+ decisions, positioning themselves to adapt to rapid market shifts and leverage seasonal demand spikes.
