Oil markets are once again in the global spotlight as prices edge higher on the back of mounting geopolitical tensions and shifting market expectations. The past week has seen a flurry of developments, with analysts and traders alike closely monitoring every headline, diplomatic move, and market survey in an environment fraught with uncertainty.
According to a comprehensive survey of 34 economists and analysts conducted in February 2026, Brent crude is now forecast to average $63.85 per barrel for the year—an uptick from January’s projection of $62.02. U.S. crude, commonly referred to as West Texas Intermediate (WTI), is expected to average $60.38 per barrel, also up from the previous month’s estimate of $58.72. These upward revisions reflect not only supply and demand fundamentals but also a significant risk premium driven by events far beyond the oil fields.
As reported by Reuters, the Brent and WTI benchmarks have averaged $70.48 and $65.01, respectively, so far in 2026. This year-to-date performance underscores the volatility that has defined oil markets, with prices swinging in response to both economic and political signals. Norbert Rucker, head of economics & next generation research at Julius Baer, offered a succinct take: “Oil prices are bloated with a decent geopolitical risk premium.” He added, “That said, Iran tensions should prove temporary and once the attention span exhausts, the focus should return on the supply glut and the lasting pressure on prices.”
So what’s driving the current surge? Much of the answer lies in the Middle East. The specter of conflict between the United States and Iran has loomed large over the market, injecting a risk premium estimated between $4 and $10 per barrel. The situation escalated when U.S. President Donald Trump, in his 2026 State of the Union address, laid out his rationale for possible military action against Iran. This rhetoric was not lost on traders, who have become increasingly risk-averse in the face of potential supply disruptions.
Rebecca Babin, a senior equity trader for CIBC Private Wealth in New York, explained to Rigzone, “Crude is moving higher today on a combination of positioning and geopolitical risk heading into the weekend.” She elaborated, “Whenever markets approach a closed period without a clear diplomatic breakthrough, traders tend to add upside protection, and we’re likely seeing some call buying and risk positioning ahead of potential weekend developments.” Babin highlighted that, despite some constructive diplomatic rhetoric, actions on the ground—such as the U.S. authorizing the departure of non-essential staff from Israel and China urging its citizens to evacuate Iran—have only heightened concerns. “This remains a market trading headline to headline,” she noted, emphasizing the nervousness pervading the market.
Phil Flynn, a senior market analyst at the PRICE Futures Group, echoed these sentiments. He told Rigzone, “Oil is up on growing speculation that an attack on Iran’s nuclear infrastructure won’t be avoided. It’s classic risk aversion as no one wants to be short ahead of an attack and have to ride out the price spike.” Flynn warned that “any attack would cause a major price spike, at least initially, and many do not want to be short if that happens.”
Art Hogan, chief market strategist at B. Riley Wealth, tied the recent price movements directly to the survey results and the geopolitical backdrop, stating, “The key to the increase sits with the concerns that a potential conflict between the U.S. and Iran could affect supplies.” Hogan pointed out that President Trump’s remarks have only added fuel to the fire. “The fear of the potential disruption of supply in current prices could eventually dissipate from crude prices if and when a peaceful resolution to the Iranian conflict comes about,” he added.
It’s not just the U.S. and Iran making waves. The Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, remains a central player in the unfolding drama. As reported by Reuters, OPEC+ is expected to consider increasing oil output by 137,000 barrels per day in April 2026, potentially ending a three-month pause in production hikes. This decision is especially significant as the group prepares for peak summer demand, with eight OPEC+ producers scheduled to meet on Sunday, March 1, 2026. Zain Vawda, analyst at MarketPulse by OANDA, remarked, “If the geopolitical risk premium remains in play by then, this may further embolden (OPEC) to resume output hikes.”
On the demand side, analysts anticipate modest growth in 2026, with estimates ranging from 0.5 to 1.1 million barrels per day. However, several factors are expected to temper this growth. Surabhi Menon, research analyst at the Economist Intelligence Unit, explained, “High prices, an economic slowdown due to trade uncertainties and a higher adoption of EVs will add downward pressure to that growth.” Many analysts also predict that U.S. oil production will either plateau or slightly decline in the coming year, contributing to the complex supply-demand equation.
China’s role cannot be understated. The country’s recent addition of approximately 1 million barrels per day to its strategic reserves has effectively absorbed part of the global surplus, according to Cyrus De La Rubia, chief economist at Hamburg Commercial Bank. However, any slowdown in China’s stockpiling efforts could exacerbate the oversupply, with estimates of the surplus ranging from 0.8 million to 3.5 million barrels per day.
Market nerves were on full display in a recent report from Skandinaviska Enskilda Banken AB (SEB), which highlighted that Brent crude traded in a wide range of $69.16 to $72.61 per barrel amid optimism and pessimism over Iranian nuclear negotiations in Geneva. The report, cited by Rigzone, noted, “Brent crude is up one percent to $71.4 per barrel this morning as the market is getting nervous for what might happen during the weekend.” SEB analysts outlined four possible oil price scenarios, with prices ranging from as low as $55 per barrel to as high as $150 per barrel, underscoring the market’s current uncertainty.
Aaron Hill, chief market analyst at FP Markets, summed up the current sentiment: “Oil prices are edging higher today as the market leans on supply side discipline from OPEC+ and elevated geopolitical tensions in the Middle East, both of which are keeping a firm risk premium embedded in crude.” Hill also pointed to traders’ positioning ahead of key inflation data, suggesting that stronger readings could reinforce energy price pressures, creating a short-term bid despite underlying concerns about slower demand growth in 2026.
While the White House, Iran, Israel, and China have yet to comment on the latest developments, the oil market remains caught between the push and pull of geopolitical headlines and fundamental supply-demand dynamics. For now, traders and analysts are bracing for what could be a decisive few weeks, with every diplomatic maneuver and policy decision carrying the potential to swing prices dramatically.
As the world waits to see whether tensions in the Middle East will escalate further or subside, oil markets continue to serve as a barometer for global risk—reminding us all that in this business, the only certainty is uncertainty itself.