Oil prices surged during Asian trading on Wednesday, as escalating tensions between the United States and Iran reignited fears of possible supply disruptions across the Middle East. Heightened geopolitical risk added upward pressure to crude markets early in the session.
Crude prices were further supported by industry data showing an unexpectedly sharp decline in U.S. oil inventories last week. Severe cold weather across parts of the United States disrupted production and logistics, tightening near-term supply conditions.
Brent crude futures for April delivery advanced 1.2% to $68.15 a barrel, while West Texas Intermediate (WTI) futures climbed 1.4% to $63.69 a barrel by 21:01 ET (02:01 GMT).
Oil gains as U.S.–Iran tensions intensify ahead of nuclear talks
Reports overnight indicated that U.S. forces shot down an Iranian drone that was approaching a U.S. aircraft carrier in the Arabian Sea. In a separate incident, Iranian gunboats were observed moving toward a U.S.-flagged oil tanker in the Strait of Hormuz, a critical global shipping route.
These events unfolded just days before scheduled talks between Washington and Tehran. However, uncertainty grew after Iranian officials insisted that Friday’s discussions be limited strictly to bilateral nuclear negotiations, raising doubts over whether the talks will proceed at all.
Donald Trump has previously warned of further military action if Iran fails to comply with U.S. demands to curb its nuclear program, while Tehran has threatened strong retaliation in response to any escalation. Any increase in military conflict in the region could significantly disrupt oil exports, lending further support to crude prices.
U.S. inventories fall sharply amid weather-related production outages
Oil markets were also lifted by data pointing to a substantial and unexpected draw in U.S. crude inventories. Figures from the American Petroleum Institute showed stockpiles fell by 11.1 million barrels in the week ending January 30, compared with expectations for a build of 0.7 million barrels.
API data often signals a similar trend in official government inventory figures, which are due later in the day. The sharp decline was largely attributed to extreme cold weather, which curtailed oil production across several regions and disrupted exports from the U.S. Gulf Coast.
Ongoing supply disruptions within the United States have contributed to firmer oil prices in recent weeks, reinforcing bullish sentiment in global crude markets.
