A resonant-tunneling diode (RTD) terahertz oscillator composed of a long narrow RTD and a rectangular cavity resonator is proposed, and its oscillation characteristics are simulated and analyzed. The rectangular cavity resonator reduces both the oscillator inductance and resistance, while the large-area RTD enables high output power with a high oscillation frequency. To estimate the radiation power accurately, a detailed equivalent circuit model was extracted from 3D electromagnetic simulation. From the analysis, the proposed device is expected to produce a high output power of approximately 2-3 mW at around 1 THz.