Oil Prices Slide On Record Global Glut Forecast, Easing Iran Tensions

Oil prices headed for their first back-to-back weekly decline of the year Friday, pressured by a bearish outlook from the International Energy Agency (IEA) and signals that diplomatic talks between the United States and Iran could be prolonged, reducing the immediate risk of supply disruptions, reports Bloomberg.

West Texas Intermediate (WTI) held steady below $63 a barrel after a nearly 3% drop on Thursday, while Brent crude stabilised above $67. The decline followed a broader "risk-off" sentiment across global markets, with Asian equities tracking losses from Wall Street.

The IEA's latest monthly report delivered a stark warning to the market, reiterating a projected global crude surplus of 3.7 million barrels per day for 2026—a record annual average.

According to the agency, global stockpiles expanded last year at their fastest rate since the 2020 pandemic, creating a massive supply buffer that has dulled the impact of regional instability.

Geopolitical tensions also eased after President Donald Trump indicated that nuclear negotiations with Tehran could stretch for "as long as a month." The diplomatic window has lowered the immediate probability of U.S. military action or tanker seizures, which traders had previously priced in as a significant risk to Middle Eastern flows.

The market is also weighing the impact of a shifting energy map in Asia. As part of a landmark trade framework announced on Feb. 7, the White House maintains that India has committed to halting purchases of Russian Federation oil in exchange for tariff relief.

While India's Ministry of External Affairs has been diplomatically vague, stating the "Joint Statement" remains the basis of understanding, U.S. officials testified this week that New Delhi is already actively diversifying away from Russian barrels

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