Oil prices moved higher on Wednesday, supported by renewed geopolitical concerns surrounding fragile U.S.–Iran negotiations, while signs that the recent supply glut is easing — helped by firmer demand from India — also underpinned the market.
Brent crude futures gained 57 cents, or 0.83%, to $69.37 per barrel by 0711 GMT. U.S. West Texas Intermediate crude rose 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,” analysts at LSEG said in a report.
A spokesperson for Iran’s foreign ministry said Tuesday that recent nuclear discussions with Washington allowed Tehran to assess the seriousness of the U.S. position and indicated sufficient common ground to pursue diplomacy further.
Iranian and U.S. representatives met in Oman last week in an effort to revive talks, after President Donald Trump deployed a naval flotilla to the region, stoking concerns about potential military escalation.
Prices initially softened after Oman’s foreign minister described the talks between the U.S. and Iran’s top security official as constructive. However, optimism faded following reports that the U.S. could dispatch a second aircraft carrier to the Middle East if negotiations collapse, ANZ analysts noted.
Trump said Tuesday he is weighing the possibility of sending another carrier to the region, even as both sides prepare for further discussions aimed at preventing renewed conflict.
Beyond geopolitics, supply dynamics also lent support. Markets have been gradually absorbing surplus barrels that built up 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 have reportedly scaled back purchases of Russian crude as New Delhi works toward a trade agreement with Washington, leading to increased imports from the Middle East and West Africa.
Market participants are also awaiting weekly U.S. inventory data from the Energy Information Administration due later Wednesday.
A Reuters poll of analysts suggested crude stockpiles likely increased by around 800,000 barrels in the week to February 6, while distillate and gasoline inventories were expected to decline by roughly 1.3 million and 400,000 barrels, respectively.
Meanwhile, industry data from the American Petroleum Institute showed U.S. crude inventories jumped by 13.4 million barrels in the week ended February 6, according to market sources.