Key Moments
- Brent April futures rose 1.2% to $68.15 per barrel, while WTI gained 1.4% to $63.69 per barrel by 21:01 ET (02:01 GMT).
- Meanwhile, reports of U.S.-Iran incidents near major shipping routes increased fears of Middle East supply disruptions ahead of nuclear talks.
- Additionally, API data showed U.S. crude inventories fell by 11.1 million barrels, far exceeding expectations for a modest build.
Geopolitical Tensions Lift Crude Prices
Oil prices rose sharply in Asian trading on Wednesday. This move followed rising tensions between the United States and Iran, which increased concerns about supply risks in the Middle East.
Specifically, traders reacted to reports that the U.S. military shot down an Iranian drone near a U.S. aircraft carrier in the Arabian Sea.
Meanwhile, Iranian gunboats were reported to have approached a U.S.-flagged tanker in the Strait of Hormuz. This waterway remains a vital route for global crude shipments.
These incidents occurred just days before planned talks between Washington and Tehran. However, Iranian officials reportedly want the discussions limited to nuclear issues only. As a result, uncertainty has grown over whether the talks will proceed.
In addition, U.S. President Donald Trump warned of further military action if Iran refuses to curb its nuclear program. Tehran, in response, has threatened strong retaliation.
Consequently, fears of supply disruptions from the Middle East have continued to support oil prices in recent sessions.
Market Snapshot: Futures Performance
| Contract | Change | Price (per barrel) | Time |
|---|---|---|---|
| Brent April futures | +1.2% | $68.15 | 21:01 ET (02:01 GMT) |
| West Texas Intermediate (WTI) crude futures | +1.4% | $63.69 | 21:01 ET (02:01 GMT) |
Sharp U.S. Inventory Draw Supports Prices
Beyond geopolitics, oil prices also found support from fresh inventory data. The figures pointed to a sharp and unexpected drop in U.S. stockpiles.
According to the American Petroleum Institute, U.S. crude inventories fell by 11.1 million barrels in the week ending January 30. By contrast, analysts had expected a build of 0.7 million barrels.
Moreover, the API report often signals trends ahead of official government data. These figures are scheduled for release later in the day.
The large drawdown also coincided with severe cold weather across the United States. As a result, oil production slowed, and exports from the Gulf Coast faced disruptions.
Overall, these domestic supply issues have added to recent price strength. At the same time, global markets remain highly sensitive to geopolitical risks.
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