Overview
Oil prices dipped in Asian trading on Friday following a signal that U.S.-Iran negotiations will continue, while traders also assessed the implications of larger Venezuelan crude flows. By 20:15 ET (01:15 GMT), Brent futures for April were down 0.4% at $70.48 a barrel and West Texas Intermediate futures fell 0.5% to $64.92 a barrel.
Both contracts were slightly lower for the month of February as the market balanced lingering geopolitical supply risks against indications of rising global output and concerns about softer demand.
Diplomatic developments between the U.S. and Iran
Negotiations between the United States and Iran over Tehran’s nuclear ambitions concluded on Thursday without a definitive agreement. Both parties indicated, however, that discussions will resume, including technical-level meetings scheduled to take place next week in Vienna, according to Oman, which has been acting as a mediator.
Elevated tensions involving Iran had been a prominent factor pressuring markets in February. Those tensions intensified as the United States assembled a substantial military presence in the Middle East and threatened action should Iran not accept a deal.
Analysts at ANZ highlighted the wide potential range for oil supply outcomes depending on the course of negotiations. They wrote: "Oil supply could be anywhere between 10mb/d lower or 1mb/d higher than current levels, depending on the outcome of current peace talks." They also noted a specific regional vulnerability: "However, the Strait of Hormuz is the focus. Anything short of sustained disruption to oil supplies in that waterway would likely see only temporary rallies in the oil price," adding that Organization of Petroleum Exporting Countries producers are likely to release more production to offset any disruptions.
The Strait of Hormuz is a critical shipping corridor in the Middle East, with Iran controlling the northern approaches to the channel. The analysts underscored that any major conflict involving Iran would be likely to disrupt shipping through that route.
Venezuelan crude re-enters markets
Separately, U.S. officials said oil sales under a recent supply agreement between the United States and Venezuela are expected to reach $2 billion by the end of February. The statement follows Washington taking control of Venezuela’s oil industry at the start of the year with President Nicolas Maduro’s capture by U.S. forces.
Since that change in control, Venezuela has increased domestic production. Major trading houses, including Vitol and Trafigura, are marketing a substantial share of the country’s output. Several buyers across Asia and Europe, among them India, a key oil consumer, are scheduled to receive Venezuelan crude in the coming weeks.
Venezuela’s reintroduction into international markets represents a marked increase in global supply. Market participants noted that this trend could exert downward pressure on crude prices in the months ahead. Concerns about a potential supply glut in 2026 had already been cited as a significant negative factor for oil in recent months.
Market takeaway
In the near term, oil markets are navigating between two opposing forces: the easing of an immediate geopolitical supply shock if talks progress, and an increase in physical supply from Venezuela that could add to longer-term downside pressure. Traders and analysts are watching for developments in Vienna next week and for the pace at which Venezuelan barrels are absorbed by global buyers.