Oil prices moved higher during Asian trading on Wednesday, staying close to seven-month highs reached earlier this week. Ongoing U.S.-Iran tensions supported crude markets, offsetting bearish pressure from a large increase in U.S. oil inventories and renewed trade policy uncertainty.
As of 22:41 ET (03:41 GMT), Brent crude futures for April delivery climbed 1% to $71.49 per barrel. West Texas Intermediate (WTI) crude futures advanced 1.3% to $66.46 per barrel. Both benchmarks had fallen around 1% on Tuesday amid fresh concerns over U.S. trade tariffs.
US-Iran Tensions Keep Risk Premium Elevated
Oil prices continue to reflect a geopolitical risk premium linked to the Middle East. U.S. officials, including special representative Steve Witkoff and presidential adviser Jared Kushner, are scheduled to meet Iranian counterparts in Geneva on Thursday in an effort to revive negotiations over Iran’s nuclear program.
Iran’s foreign minister has indicated that a diplomatic agreement is possible if both sides prioritize dialogue, suggesting Tehran could show flexibility on key issues in exchange for sanctions relief.
However, President Donald Trump has warned of “very bad consequences” if talks fail, raising concerns that stalled negotiations could escalate into military confrontation.
Analysts at ING noted that the United States is also increasing its military presence in the region. They warned that without a diplomatic breakthrough, the likelihood of military action remains elevated. Trump’s reported 10-to-15-day deadline for Iran, which falls in early March, adds further uncertainty and keeps oil markets sensitive to new developments.
US Crude Inventories Surge: API Data
On the supply side, the American Petroleum Institute (API) reported an unexpected 11.4 million-barrel increase in U.S. crude inventories for the week ending February 20. This figure significantly exceeded market expectations for a 1.9 million-barrel build.
In contrast, gasoline and distillate stockpiles declined during the same period. Traders are now awaiting official inventory data from the Energy Information Administration (EIA) for confirmation.
Trade Tariff Uncertainty Weighs on Market Sentiment
Global sentiment was also influenced by renewed U.S. trade policy developments. President Donald Trump’s 10% global import tariff took effect on Tuesday, with plans underway to raise the levy to 15%.
The tariff action followed a U.S. Supreme Court ruling that invalidated an earlier trade program, prompting the administration to reintroduce duties under alternative legal authority.
Despite the sharp rise in U.S. crude stocks and ongoing trade tensions, geopolitical risks in the Middle East continue to provide underlying support for oil prices.
