Key Moments
- Brent crude fell $1.54 to $67.92 and WTI dropped $1.52 to $63.62, both down more than 2%.
- Oil markets focused on planned U.S.-Iran talks in Oman as tensions and military buildups persisted in the Middle East.
- Record WTI Midland at Houston trading in January and widening Russian discounts to China underscored heightened supply and geopolitical uncertainty.
Prices Pull Back but Stay Near Multi-Month Highs
Oil prices declined more than 2% on Thursday, retreating from recent multi-month highs, after the United States and Iran agreed to hold talks in Oman on Friday.
By 1306 GMT, Brent crude futures were down $1.54, or 2.2%, at $67.92 per barrel, while U.S. West Texas Intermediate (WTI) crude lost $1.52, or 2.3%, to trade at $63.62.
| Contract | Price | Move | Percentage Change | Time (GMT) |
|---|---|---|---|---|
| Brent crude futures | $67.92 | -$1.54 | -2.2% | 1306 |
| WTI crude (U.S.) | $63.62 | -$1.52 | -2.3% | 1306 |
Geopolitics and the Strait of Hormuz in Focus
Oil prices remained highly sensitive to developments in the Middle East, with market participants closely monitoring the outcome of the planned talks in Oman, UBS analyst Giovanni Staunovo said.
The discussions follow a buildup of U.S. forces in the region and efforts by regional actors to prevent a conflict that many fear could expand into a broader war.
About a fifth of global oil consumption moves through the Strait of Hormuz, which lies between Oman and Iran. Key OPEC producers – Saudi Arabia, the United Arab Emirates, Kuwait and Iraq – ship most of their crude exports through this chokepoint, as does Iran.
Market Sentiment Ahead of Oman Talks
PVM Oil Associates analyst John Evans noted that ahead of Friday’s meeting, price action was likely to be muted as traders positioned around the possibility of a diplomatic breakthrough.
“However, there will be no comfort as such in prices, for one untoward remark or a breakdown in talks and the Brent price will soon be banging on the door of $70 a barrel and looking at year-to-date highs,” he said.
Volatility Spurs Hedging and Drives Trading Activity
Heightened volatility has driven investors to step up efforts to secure price levels this year. Market participants traded a record number of WTI Midland at Houston contracts in January, reflecting concerns over supply risks tied to the Middle East and the prospect of additional Venezuelan crude flows to the U.S. Gulf Coast.
Analysts added that strength in the U.S. dollar and swings in precious metals prices also pressured commodities and dampened broader risk appetite on Thursday.
Russian Discounts Deepen, Trade Flows Shift
On the supply front, traders said that discounts on Russian oil exports to China widened to fresh records this week, aimed at bolstering demand from the world’s largest crude importer and compensating for an expected drop in sales to India.
The shift followed a trade deal announced earlier in the week between the U.S. and India, under which India agreed to halt purchases of Russian crude.
Argentina’s Energy Outlook and Vaca Muerta Potential
Looking ahead, Argentina’s energy trade surplus could exceed last year’s record levels in 2026, supported by crude production from the Vaca Muerta shale formation. Three analysts told Reuters that the surplus could range between $8.5 billion and $10 billion.
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