Oil prices rise amid continued uncertainty between the US and Iran
Oil prices rose more than 1.5% during trading on Wednesday, supported by escalating geopolitical uncertainty between the US and Iran, as well as signs of improving global demand for crude.
Prices rose as nuclear talks between Washington and Tehran continued to falter, reinforcing concerns about supply risks in the Middle East.
The benchmark Brent crude rose 1.7% to around $69.80 a barrel, approaching the psychologically important $70 level. West Texas Intermediate crude rose by a similar amount to around $65.00 a barrel.
Geopolitical tensions support prices despite stable supplies
Ongoing tensions in the Middle East remain a key support factor for oil prices, even though there has been no actual disruption to supplies so far.
Analysts believe that the mere possibility of future disruptions to production or shipping could keep the risk premium high in the market. At the same time, data on crude oil withdrawals from some major inventories point to a relative improvement in demand, which is helping to absorb part of the expected surplus in the coming period.
Mixed statements from Tehran and Washington
On the diplomatic front, a spokesman for the Iranian Foreign Ministry said on Tuesday that nuclear talks with the United States had allowed Tehran to assess Washington's seriousness, noting that there was sufficient consensus to continue the negotiation process.
However, the situation was not entirely calm, as US President Donald Trump announced on the same day that he was considering sending a second aircraft carrier to the Middle East, in a move that reflects continued military caution despite the willingness to resume negotiations between the two sides.
Despite some harsh statements from both sides, there are still no clear signs of a direct military escalation, and Trump has indicated his belief that Iran will ultimately seek an agreement on its nuclear and missile programs.
Declining surplus and inventory data
On the other hand, oil prices received additional support from signs of a decline in the expected supply surplus in the fourth quarter of 2025, as the market appears to be gradually absorbing some of the excess barrels.
Traders are currently awaiting the release of weekly US oil inventory data from the Energy Information Administration (EIA) on Wednesday, which is seen as an important indicator of supply and demand trends in the world's largest energy market.
Preliminary data from the American Petroleum Institute (API) showed US crude inventories rose by about 13.4 million barrels during the week ending February 6, a figure that could put pressure on prices if officially confirmed by the Energy Information Administration.
Oil between diplomacy and supplies
Energy markets appear to be strongly influenced by geopolitical factors again, after months of relative dominance by concerns over Chinese demand and interest rate policies.
Today's rise in crude oil confirms that the region is still capable of moving prices with a single statement or limited military action.
Traders face a difficult equation: US data points to abundant supply, but the potential escalation in the Middle East could tip the scales at any moment, especially with demand improving.
