Oil prices gained on Wednesday, buoyed by escalating risk as U.S.–Iran talks remained tenuous, while signs of an easing surplus spurred by better demand support from India also added strength. Brent crude oil futures were up 55 cents, or 0.80%, at $69.35 a barrel by 0356 GMT. U.S. West Texas Intermediate crude rose 57 cents, or 0.89%, to $64.53.
“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 wrote in a report.
Iran’s foreign ministry spokesperson said on Tuesday that nuclear talks with the U.S. allowed Tehran to gauge Washington’s seriousness and showed enough consensus to continue on the diplomatic track. Diplomats from Iran and the U.S. held talks in Oman last week in an effort to revive diplomacy, after U.S. President Donald Trump positioned a naval flotilla in the region, raising fears of new military action. While oil prices first eased after Oman’s foreign minister said discussions tied to the U.S.-Iran talks with Iran’s top security official were productive, hopes of a peaceful resolution were later dashed following reports that the U.S. may send a second aircraft carrier to the Middle East if talks fail, ANZ analysts said in a note. Trump said on Tuesday he was considering sending a second aircraft carrier to the Middle East, even as Washington and Tehran prepare to resume negotiations aimed at averting a new conflict. Also supporting oil prices were signs of easing surplus, as markets absorbed some surplus barrels seen in the last 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,” Vortexa market analyst Xavier Tang said. Indian refiners are avoiding Russian oil purchases to help New Delhi seal a trade pact with Washington, in turn stepping up purchases of oil from the Middle East and West Africa.
Traders are also waiting for weekly U.S. oil inventory data from the Energy Information Administration on Wednesday. Analysts polled by Reuters estimated on average that crude inventories rose by about 800,000 barrels in the week to February 6, while distillate and gasoline inventories likely fell by about 1.3 million barrels and 400,000 barrels respectively. U.S. crude inventories rose by 13.4 million barrels in the week ended February 6, market sources said, citing American Petroleum Institute figures on Tuesday.
(Reporting by Emily Chow and Siyi Liu in Singapore; Editing by Stephen Coates and Saad Sayeed)