Oil Extends Gains as U.S.–Iran Tensions and Stock Draws Fuel Supply Concerns

Oil prices climbed on Wednesday, supported by rising geopolitical risk tied to fragile U.S.–Iran negotiations and fresh signs of tightening physical supply, as crude stockpiles declined at key global hubs.

Brent crude futures advanced 98 cents, or 1.4%, to $69.78 a barrel by 09:49 GMT, while U.S. West Texas Intermediate (WTI) crude rose 95 cents, or nearly 1.5%, to $64.91 a barrel.

Markets remained sensitive to developments surrounding U.S.–Iran relations. Iran’s foreign ministry spokesperson said on Tuesday that recent nuclear talks with Washington allowed Tehran to assess U.S. intentions and revealed sufficient common ground to keep diplomatic channels open. Despite this cautiously optimistic tone, uncertainty persists.

Adding to the geopolitical premium, U.S. President Donald Trump said he was considering deploying a second aircraft carrier to the Middle East, even as the two sides prepare to resume negotiations aimed at avoiding a renewed conflict. The mixed signals kept traders on edge, reinforcing risk-related support for crude prices.

Oil prices also benefited from a slightly weaker U.S. dollar, which tends to make dollar-denominated commodities more attractive to holders of other currencies, thereby supporting demand.

On the supply side, sentiment improved on signs that the global surplus is easing, with markets continuing to absorb excess barrels accumulated in the final quarter of 2025. Evidence of tighter physical conditions emerged from declining crude inventories at the Amsterdam–Rotterdam–Antwerp (ARA) refining and storage hub, as well as from Fujairah, a key Middle Eastern storage center.

“These draws point to a tighter market than previously expected,” said UBS analyst Giovanni Staunovo, noting that independent stockpiles are sending a constructive signal for prices.

Meanwhile, traders are awaiting official weekly U.S. inventory data from the Energy Information Administration (EIA) due later on Wednesday. Preliminary figures from the American Petroleum Institute showed that U.S. crude inventories rose by 13.4 million barrels in the week ended February 6, a build that could temper gains if confirmed.

For now, however, geopolitical uncertainty, easing surplus concerns, and supportive currency moves continue to underpin oil prices, keeping the market biased to the upside.