Oil Prices Pull Back After Iran-Fuelled Rally as U.S. Stockpile Data Looms

Oil prices edged lower in Asian trading on Wednesday, easing from multi-week highs reached in the previous session, as markets reassessed supply risks linked to Iran against evidence of a sharp build in U.S. crude inventories.

At 20:18 ET (01:18 GMT), Brent crude futures for March were down 0.4% at $65.19 a barrel, while U.S. West Texas Intermediate (WTI) futures slipped 0.5% to $60.87 a barrel.

Both benchmarks had climbed more than 2.5% on Tuesday, lifting Brent to an 11-week high and WTI to a 10-week peak, extending a strong rally over four straight sessions.

Iran unrest underpins recent gains

The earlier surge in prices was driven by rising geopolitical tensions as intensifying anti-government protests in Iran heightened concerns over potential disruptions to crude exports from one of OPEC’s largest producers.

Traders have built in a notable geopolitical risk premium amid fears that supply flows could be interrupted.

Market unease was amplified by comments from U.S. President Donald Trump. He warned of possible military action if Iranian authorities persist with violent crackdowns on protesters and urged demonstrators to “take over your institutions,” writing on social media that “help is on the way.”

Trump has also threatened to levy tariffs on countries that continue trading with Tehran, in a bid to further isolate the regime and adding to the risk premium embedded in oil prices.

U.S. inventories surge – API

Against this backdrop, data released on Tuesday by the American Petroleum Institute showed that U.S. crude inventories rose by 5.3 million barrels last week, far exceeding market expectations for an increase of around 2 million barrels.

Gasoline stockpiles climbed by roughly 8.2 million barrels, while distillate inventories increased by about 4.3 million barrels, pointing to ample supplies of refined fuels.

Attention now turns to the official figures from the U.S. Energy Information Administration, due later on Wednesday, which are expected to provide further confirmation of crude and product inventory trends.