Brent crude futures fell more than 1.5% on Thursday, sliding below the $70 per barrel threshold as markets recalibrated geopolitical risk premiums and refocused on mounting supply expectations. The decline reflects a delicate balance between renewed US-Iran nuclear negotiations and accelerating exports from key Middle Eastern producers, reinforcing concerns that a global surplus may re-emerge later this year.

Diplomacy Reprices Geopolitical Risk

Brent dropped to $69.64 per barrel on February 26, 2026, down 1.71% on the session. The pullback comes as Washington and Tehran launched a third round of nuclear talks, just days before a deadline previously signaled by President Donald Trump.

While the United States simultaneously imposed fresh sanctions on more than 30 entities tied to Iran’s oil and weapons trade, Iranian officials indicated a degree of negotiating flexibility. For energy markets, even incremental diplomatic progress can reduce the probability of supply disruptions, particularly in the Strait of Hormuz — a critical global shipping corridor.

Oil prices often embed a geopolitical premium during periods of tension. As talks resume, that premium appears to be moderating, pressuring near-term prices.

Export Growth Reinforces Oversupply Narrative

Beyond diplomacy, the more structural driver of weakness lies in rising export volumes. Saudi Arabia is set to ship its highest crude volumes in nearly three years, while Iraq, Kuwait, and the United Arab Emirates have also increased exports.

This collective rise in output adds to expectations of a global supply surplus later in 2026. The market is increasingly focused on whether demand growth — particularly from Asia — can absorb additional barrels without driving inventories higher.

Over the past month, Brent has still gained 3.06%, reflecting prior geopolitical support. However, on a year-over-year basis, prices remain 5.34% lower, underscoring persistent concerns about medium-term balance.

OPEC+ Decision Looms as Key Catalyst

Attention now turns to the upcoming OPEC+ meeting, where producers will clarify April production policy. The alliance faces a strategic dilemma: maintain discipline to stabilize prices or capitalize on current output capacity at the risk of accelerating oversupply.

Historically, Brent reached an all-time high of $147.50 in July 2008, a reminder of oil’s sensitivity to macroeconomic and geopolitical shocks. Today’s environment is markedly different, characterized by cautious global growth and disciplined yet expanding production from core exporters.

Looking ahead, oil markets remain trapped between diplomatic optimism and physical supply expansion. A breakthrough in US-Iran talks could further compress prices, while any unexpected escalation could quickly reverse losses. For now, the breach of $70 signals that traders are placing greater weight on surplus risk than on immediate disruption.