Oil prices climbed strongly in Asian trading on Wednesday, driven by mounting geopolitical tensions between the United States and Iran that have raised fears of possible supply disruptions in the Middle East. Prices were further supported by industry data pointing to an unexpectedly steep decline in U.S. crude inventories, after severe winter weather disrupted production.
Brent crude futures for April delivery advanced 1.2% to $68.15 a barrel, while West Texas Intermediate futures gained 1.4% to $63.69 a barrel by 21:01 ET (02:01 GMT).
Geopolitical risks lift oil ahead of U.S.–Iran talks
Concerns escalated following reports that the U.S. military shot down an Iranian drone that was approaching a U.S. aircraft carrier in the Arabian Sea. In a separate incident, Iranian gunboats were reportedly seen moving toward a U.S.-flagged tanker in the Strait of Hormuz, a key global energy shipping route.
These developments came just days before planned talks between Washington and Tehran. However, uncertainty has grown after Iranian officials reportedly pushed to limit the scope of the discussions—scheduled for Friday—to bilateral negotiations focused solely on nuclear issues, raising questions over whether the talks will proceed as planned.
U.S. President Donald Trump has warned of further military action if Iran does not comply with U.S. demands to scale back its nuclear program, while Tehran has threatened strong retaliation in response to any American aggression. Any escalation in the region risks disrupting oil flows from the Middle East, a factor that has underpinned crude prices in recent sessions.
U.S. inventories post surprise drop amid weather-related outages
Oil markets also drew support from fresh inventory data showing a much larger-than-expected drawdown in U.S. crude stockpiles. Figures from the American Petroleum Institute indicated that inventories fell by 11.1 million barrels in the week ended January 30, sharply contrasting with market expectations for a 0.7 million-barrel increase.
API data often signals a similar direction in official government figures, which are due for release later in the day. The sizeable draw was attributed to extreme cold weather across parts of the United States, which curtailed oil production and disrupted exports from the Gulf Coast.
Supply interruptions in the U.S. have been an additional tailwind for oil prices in recent weeks, reinforcing gains driven by geopolitical risk.