Oil prices advanced on Wednesday, supported by escalating geopolitical risks surrounding fragile U.S.–Iran talks and signs that a supply surplus is easing amid stronger demand from India.
Brent crude rose 55 cents, or 0.8%, to $69.35 a barrel, while U.S. West Texas Intermediate (WTI) gained 57 cents, or 0.89%, to $64.53 in early trading.
Analysts said oil continues to carry a “bullish risk premium” as negotiations between Washington and Tehran remain uncertain. While Iran signaled that recent nuclear talks showed enough progress to stay on the diplomatic path, the situation remains delicate. Reports that the U.S. may deploy a second aircraft carrier to the Middle East if talks fail have heightened supply-disruption concerns, particularly around the strategic Strait of Hormuz.
Earlier optimism emerged after Oman described the discussions as productive, but renewed military signals from Washington tempered hopes of a quick resolution.
Beyond geopolitics, fundamentals also offered support. Market participants noted that surplus supply seen in late 2025 is gradually being absorbed. Demand from India has strengthened, especially as Indian refiners reduce Russian oil purchases in favor of Middle Eastern and West African crude amid trade negotiations with the U.S.
Investors are now awaiting official U.S. inventory data from the Energy Information Administration (EIA). Analysts expect crude stockpiles to have risen by about 800,000 barrels last week, though industry data from the American Petroleum Institute indicated a much larger build of 13.4 million barrels.
With geopolitical uncertainty persisting and demand signals improving, oil prices appear supported in the near term.
Frequently Asked Questions
Why did oil prices rise?
Oil gained due to escalating geopolitical risks tied to fragile U.S.–Iran talks, which increased concerns about potential supply disruptions, especially around the Strait of Hormuz.
How do U.S.–Iran tensions impact oil prices?
Any threat of military escalation or tighter sanctions on Iran can disrupt oil flows from the Middle East. This adds a “risk premium” to prices, pushing crude higher.
What role is India playing in supporting oil prices?
Indian refiners are reportedly reducing Russian oil purchases and increasing imports from the Middle East and West Africa. Stronger Indian demand is helping absorb excess global supply.
What is happening with U.S. oil inventories?
Market expectations suggest a modest rise in crude inventories, but industry data from the American Petroleum Institute showed a much larger build. Traders are awaiting official EIA figures for confirmation.
What should traders watch next?
Key factors include progress in U.S.–Iran negotiations, U.S. military developments in the region, weekly U.S. inventory data, and global demand trends—particularly from major consumers like India and China.
