Oil prices surged nearly 3.5% on Wednesday after reports suggested that planned diplomatic talks between the United States and Iran could break down, raising fresh concerns over supply risks in the Middle East.
U.S. crude jumped $2.12, or about 3.5%, to trade above $65.30 a barrel by 1:35 p.m. ET. Brent crude, the global benchmark, climbed $2.28, or roughly 3.4%, to around $69.60 a barrel.
The rally followed a report from Axios, which said disagreements had emerged between Washington and Tehran over the venue for talks scheduled for Friday. According to the report, both sides initially agreed to meet in Istanbul, with other Middle Eastern countries attending as observers. Iran later pushed to change the format to a bilateral meeting in Oman, a proposal U.S. officials reportedly rejected. Tehran was also unwilling to revert to the original Istanbul arrangement.
Axios noted that negotiations could still take place later this week or next if Iran agrees to return to the original meeting framework.
The diplomatic uncertainty comes against a backdrop of rising tensions. The U.S. military said on Tuesday it had shot down an Iranian drone that approached a U.S. aircraft carrier in the region. Donald Trump has also warned of possible military action if Iran fails to agree to terms governing its nuclear program, adding to market anxiety and fueling the surge in oil prices.
