Oil prices slipped modestly in Asian trading on Wednesday, pulling back from multi-week highs reached in the previous session, as investors weighed concerns over potential supply disruptions in Iran against data pointing to a sharp rise 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 declined 0.5% to $60.87 a barrel.
Both benchmarks had jumped more than 2.5% on Tuesday, lifting Brent to an 11-week high and WTI to a 10-week peak, extending a strong rally that has now lasted four consecutive sessions.
Iran supply risks underpin recent gains
The surge in prices earlier in the week was driven by heightened geopolitical tensions tied to intensifying anti-government protests in Iran, which have raised concerns about potential disruptions to crude exports from one of OPEC’s major producers.
Traders have increasingly factored in a geopolitical risk premium amid fears that supply flows could be interrupted.
Comments from U.S. President Donald Trump added to market unease. Trump warned of possible military action if Iranian authorities continue violent crackdowns on protesters and urged demonstrators to “take over your institutions,” writing on social media that “help is on the way.”
He has also threatened to impose tariffs on countries that continue trading with Tehran, in a bid to further isolate the regime, adding to the geopolitical premium priced into oil markets.
U.S. crude inventories jump – API
Against this backdrop, data released on Tuesday by the American Petroleum Institute showed U.S. crude stockpiles rose by 5.3 million barrels last week, well above market expectations for an increase of around 2 million barrels.
Gasoline inventories climbed by about 8.2 million barrels, while distillate stocks rose roughly 4.3 million barrels, pointing to ample supplies of refined products.
Attention now turns to the official figures from the U.S. Energy Information Administration, due later on Wednesday, which are expected to provide further clarity on crude and fuel inventory trends.