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Oil prices rose in Asian trading on Wednesday, remaining just below seven-month highs reached earlier this week, as persistent geopolitical risks surrounding the U.S.–Iran standoff outweighed bearish signals from a sharp rise in U.S. crude inventories and renewed uncertainty over global trade policy.
By 22:41 ET (03:41 GMT), Brent crude futures for April delivery climbed 1% to $71.49 a barrel, while U.S. West Texas Intermediate (WTI) crude surged 1.3% to $66.46 a barrel. Both benchmarks had slipped about 1% in the previous session amid fresh jitters over U.S. tariffs.
Geopolitical Risk Premium Remains Elevated Ahead of Geneva Talks
Oil markets continued to price in a sizable geopolitical risk premium tied to tensions in the Middle East. U.S. officials, including special envoy Steve Witkoff and presidential adviser Jared Kushner, are scheduled to meet Iranian counterparts in Geneva on Thursday in a renewed effort to revive a nuclear deal.
Iran’s foreign minister has indicated that an agreement remains within reach if diplomacy is prioritized, signaling potential flexibility on sensitive issues in exchange for sanctions relief. However, the risks of escalation remain high.
U.S. President Donald Trump has warned of “very bad consequences” if talks fail, reinforcing concerns that stalled negotiations could tip into open conflict. ING analysts noted that the U.S. continues to build up military assets in the region, increasing the likelihood of military action should diplomacy break down.
“President Trump’s 10-to-15-day deadline for Iran points to early March,” ING said. “This uncertainty means the market will continue to price in a large risk premium and remain highly sensitive to any new developments.”
U.S. Inventory Build Weighs on Fundamentals
On the supply side, the American Petroleum Institute reported an 11.4 million-barrel surge in U.S. crude inventories for the week ended February 20, far exceeding expectations for a modest 1.9 million-barrel increase. The data highlighted near-term oversupply pressures in the U.S. market.
However, the bearish impact was partly offset by declines in gasoline and distillate inventories, pointing to resilient demand. Traders are now awaiting official inventory figures from the Energy Information Administration later on Wednesday for confirmation.
