Oil prices rose in Asian trade on Wednesday, holding just below seven-month highs touched earlier this week as persistent U.S.-Iran tensions offset bearish signals from a large U.S. crude stock build and fresh trade uncertainty.
As of 22:41 ET (03:41 GMT), Brent Oil Futures expiring in April rose 1% to $71.49 per barrel, while West Texas Intermediate (WTI) crude futures jumped 1.3% to $66.46 per barrel.
Both contracts declined 1% on Tuesday amid fresh U.S. trade tariff jitters.
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US-Iran conflict worries remain even as Geneva talks loom
Oil was underpinned by rising risk premiums tied to the Middle East. U.S. envoys, including special representative Steve Witkoff and presidential adviser Jared Kushner, are due to meet Iranian counterparts in Geneva on Thursday, with hopes of reaching a nuclear deal.
Iran’s foreign minister has signaled that a diplomatic deal is achievable if both sides prioritise talks, offering Tehran flexibility on sensitive issues in exchange for sanctions relief.
U.S. President Donald Trump has warned that there would be “very bad consequences” if a deal is not reached, underscoring the risk that negotiations could escalate into conflict.
"At the same time, the US continues to build up military assets in the region. So, without a deal, the probability of military action is high and growing," ING analysts said in a note.
"President Trump’s 10-to-15-day deadline for Iran works out to a date sometime in very early March. This uncertainty means the market will continue to price in a large risk premium and remain sensitive to any fresh developments," they added.
US crude stocks rise much above expectations - API
On the supply side, the American Petroleum Institute reported a sharply larger-than-expected 11.4 million-barrel build in U.S. crude inventories for the week ended February 20, far exceeding market expectations for a modest 1.9 million-barrel rise.
However, gasoline and distillate stocks declined. Traders await the Energy Information Administration’s (EIA) official data later in the day for confirmation.
Global market sentiment was also shaped by renewed U.S. trade policy uncertainty, with President Trump’s 10% global import tariff taking effect on Tuesday, and plans underway to raise it to 15%.
The tariff move comes after the U.S. Supreme Court struck down an earlier tariff programme, prompting the administration to reimpose duties under alternative authority.
