Oil prices climbed on Wednesday, supported by persistent geopolitical tension surrounding delicate negotiations between the United States and Iran, while improving demand from India and signs of a shrinking supply surplus also lent support.
Brent crude futures rose 57 cents, or 0.83%, to $69.37 a barrel by 0711 GMT. U.S. West Texas Intermediate crude gained 56 cents, or 0.88%, to $64.52.
“Oil retains a bullish tail-risk bid as US-Iran talks continue but remain fragile, keeping the Strait of Hormuz risk premium supported amid ongoing sanctions pressure, tariff threats tied to Iranian trade, and heightened U.S. regional military posture,” LSEG analysts said in a report.
Iran’s foreign ministry spokesperson said Tuesday that recent nuclear discussions with Washington allowed Tehran to evaluate the seriousness of the U.S. stance and revealed enough common ground to maintain diplomatic engagement.
Officials from Iran and the United States met in Oman last week in an attempt to revive negotiations, after President Donald Trump deployed naval forces to the region — a move that raised concerns about potential military escalation.
Prices initially dipped after Oman’s foreign minister described the talks as productive. However, sentiment shifted after reports suggested the U.S. could send a second aircraft carrier to the Middle East if negotiations fail, according to ANZ analysts.
Trump confirmed on Tuesday that he is considering dispatching another carrier, even as both sides prepare to resume talks aimed at avoiding renewed conflict.
Beyond geopolitical risks, supply fundamentals also provided support. The market has been gradually absorbing excess crude that accumulated in the final quarter of 2025.
“With mainstream oil on water returning to normal levels and demand for it in India rising, oil prices are likely to remain supported in the near term,” said Xavier Tang, a market analyst at Vortexa.
Indian refiners are reportedly curbing purchases of Russian crude as New Delhi seeks to finalize a trade agreement with Washington, leading to higher imports from the Middle East and West Africa.
Investors are also watching for weekly U.S. inventory figures from the Energy Information Administration.
A Reuters survey showed analysts expect crude stockpiles to have increased by around 800,000 barrels in the week to February 6, while distillate and gasoline inventories are seen falling by roughly 1.3 million and 400,000 barrels, respectively.
Separate data from the American Petroleum Institute indicated that U.S. crude inventories surged by 13.4 million barrels in the same week, according to market sources.
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