Market Brief: Energy Outlook 2026 Crude oil markets are navigating significant volatility as geopolitical risks and shifting inventory data collide. Prices are currently hovering near six-month highs, with **Brent crude** trading around **$71.40** and **West Texas Intermediate (WTI)** positioned at **$66.05**. The primary driver is the intensifying standoff between the U.S. and Iran. Tensions have escalated following a **10-to-15 day ultimatum** from President Trump for Tehran to secure a new nuclear agreement. While military posturing in the Middle East has increased, the market is bracing for a third round of negotiations scheduled for this Thursday, February 26, in Geneva. Supply Risks and Trade Policy Iran remains a pivotal global producer, pumping approximately **3.3 million barrels per day**. Analysts warn that any disruption to the Strait of Hormuz—a chokepoint for **20% of global oil and LNG trade**—could push prices toward **$90** or even triple digits. Adding to the complexity, the White House has signaled plans to increase temporary tariffs from **10% to 15%** on certain trading partners. This trade policy shift creates a ceiling for price rallies, as higher tariffs could dampen global economic growth and long-term oil demand. Inventory and Production Trends U.S. domestic data is currently sending mixed signals. Recent reports from the American Petroleum Institute indicated a substantial build of **11.4 million barrels** in crude stockpiles. This follows a previous week where commercial inventories fell by **9 million barrels**, leaving total stocks at **419.8 million barrels**, which is **5% below** the five-year average. Refineries are operating at **91% capacity**, yet the market remains cautious. While OPEC+ has opted to maintain production pauses through the first quarter of 2026, global supply is still projected to grow by **1.6 million barrels per day** this year. Demand Forecasts The International Energy Agency (IEA) recently revised its 2026 demand growth outlook downward to **849,000 barrels per day**. Total global consumption is expected to reach **104.87 million barrels per day**, with growth almost entirely driven by non-OECD economies, specifically China and India. Investors remain in a holding pattern, balancing a "war premium" of approximately **$4 to $10** per barrel against a projected global surplus. Near-term price action will likely be dictated by the outcome of the Geneva talks and the subsequent EIA inventory data.