Oil prices rose on Wednesday as tensions between the United States and Iran intensified, extending gains from the previous day. The increase followed a series of geopolitical developments that have raised concerns about potential supply disruptions in key global energy routes.
Brent crude futures climbed around 1%, reaching nearly $68 per barrel, while U.S. West Texas Intermediate (WTI) crude edged more than 1% higher. The gains reflected heightened risk sentiment among traders as events in the Middle East added uncertainty to global oil markets.
The U.S. military shot down an Iranian drone after it aggressively approached the USS Abraham Lincoln aircraft carrier in the Arabian Sea, the Pentagon said, contributing to the rise in prices. In a separate incident, a flotilla of Iranian gunboats approached a U.S.-flagged tanker in the Strait of Hormuz, a key chokepoint through which roughly a fifth of the world’s oil supply passes.
These incidents have added pressure on diplomatic efforts aimed at lowering tensions. Iranian demands to relocate planned talks with the U.S. to Oman and limit them to nuclear issues have cast doubt on whether the talks will proceed as planned, underscoring the fragile state of the discussions.
Read: Oil Prices Drop 4% as US–Iran Tensions Ease
Market analysts said that rising tensions in the Middle East have supported crude prices by prompting traders to factor in a geopolitical risk premium. The oil market also got support from an unexpected drop in U.S. crude inventories, which fell sharply in the latest weekly reports, and from optimism about global energy demand following recent trade developments.
In addition, ongoing conflict in Ukraine has sustained concerns that sanctions on Russian oil supplies could remain in place for longer, further tightening market sentiment.
As the situation evolves, traders are closely watching both geopolitical and economic data. Official U.S. inventory figures are expected soon, and oil markets are likely to remain sensitive to any news that could affect global supply or demand expectations. Analysts believe prices could stay elevated if tensions persist.
