Oil prices moved higher on Wednesday as tensions between the United States and Iran continued to create uncertainty in the market. At the same time, stronger demand from India and signs that excess supply is easing also helped support prices.
Brent crude rose by 55 cents, or about 0.80%, reaching $69.35 per barrel. U.S. West Texas Intermediate (WTI) crude gained 57 cents, or 0.89%, climbing to $64.53 per barrel.
Analysts say the main reason behind the price support is the fragile situation between Washington and Tehran. Talks between the two sides are still ongoing, but they remain delicate. Because of this, traders are keeping a close eye on the Strait of Hormuz, a key route for global oil shipments. Any threat to that area can quickly push prices higher.
Iran’s foreign ministry said this week that nuclear discussions with the U.S. have shown enough progress to continue negotiations. Officials from both countries met in Oman last week in an effort to revive diplomacy. However, the situation remains tense. President Donald Trump has already positioned a naval fleet in the region, raising concerns about possible military action.
At first, oil prices dipped after Oman’s foreign minister described the talks as productive. But that optimism faded when reports suggested the U.S. might send a second aircraft carrier to the Middle East if negotiations fail. President Trump later confirmed he is considering that option, even as both sides prepare for further talks.
Beyond geopolitics, supply and demand factors are also playing a role. The oil surplus seen in late 2025 appears to be shrinking. Floating storage levels have returned closer to normal, and demand from India is rising.
India’s refiners are reportedly cutting back on Russian oil purchases to help secure a trade deal with Washington. As a result, they are increasing imports from the Middle East and West Africa, which is adding support to global prices.
Meanwhile, traders are waiting for fresh data on U.S. oil inventories. A Reuters survey of analysts suggested crude stockpiles likely increased by about 800,000 barrels in the week ending February 6. Distillate and gasoline inventories were expected to decline.
However, data from the American Petroleum Institute showed a much larger build of 13.4 million barrels in U.S. crude inventories during the same week. If confirmed by official government data, that could put pressure on prices.
For now, oil remains supported by geopolitical risks and improving demand signals. But with ongoing talks between the U.S. and Iran and mixed inventory data, volatility is likely to continue in the near term.
