Key Moments
- Brent crude rose $1.85, or 2.7%, to $69.27 a barrel at 1227 GMT, while WTI advanced $1.78, or 2.9%, to $64.11.
- Peace discussions between Ukraine and Russia in Geneva ended after about two hours, with both sides calling the talks “difficult”.
- Oil markets also reacted to developments in U.S.-Iran nuclear talks and temporary disruptions near the Strait of Hormuz.
Oil Futures Advance After Short-Lived Geneva Talks
Oil prices moved sharply higher on Wednesday after negotiations in Geneva between Ukraine and Russia ended abruptly after roughly two hours, with Ukrainian President Volodymyr Zelenskiy characterizing the session as “difficult”.
By 1227 GMT, Brent crude futures were trading $1.85 higher, or 2.7%, at $69.27 per barrel. U.S. West Texas Intermediate (WTI) crude futures gained $1.78, or 2.9%, to $64.11 per barrel.
| Contract | Price | Change | Percentage Move | Time (GMT) |
|---|---|---|---|---|
| Brent crude futures | $69.27 | $1.85 | 2.7% | 1227 |
| WTI crude futures | $64.11 | $1.78 | 2.9% | 1227 |
Following the discussions, Zelenskiy accused Moscow of intentionally slowing efforts to reach an agreement to end the four-year conflict. Russia’s chief negotiator, Vladimir Medinsky, also described the negotiations as difficult, but said they were conducted in a business-like manner and indicated that another round of talks would take place.
The talks in Switzerland, mediated by the United States, occurred as U.S. President Donald Trump had, on two recent occasions, suggested that Ukraine bore responsibility for taking steps needed to make the negotiations successful.
Regional Supply Tensions in Central and Eastern Europe
Hungary has stopped delivering diesel to neighboring Ukraine and will not restart those shipments unless Kyiv resumes crude oil flows through the Druzhba pipeline to Hungary, Hungarian Foreign Minister Peter Szijjarto said on Wednesday.
Russian crude deliveries transiting Ukraine to Slovakia and Hungary have faced weeks of disruption. Ukraine attributes these interruptions to a Russian attack that it says took place on January 27.
Market Reaction to U.S.-Iran Nuclear Discussions
Oil prices had declined on Tuesday after Iran and the United States reached an understanding on “guiding principles” in negotiations intended to address their long-running nuclear dispute. Iranian Foreign Minister Abbas Araqchi said that this understanding did not mean that a final agreement was imminent.
As those talks began on Tuesday, Iranian state media reported that Iran had temporarily closed parts of the Strait of Hormuz, a key transit channel for global oil shipments, citing “security precautions” during military exercises by the elite Revolutionary Guards. Later, state media said the strait had been shut for a few hours, without clarifying whether it had fully reopened.
SEB chief commodities analyst Bjarne Schieldrop, in a note, wrote: “Iran knows Trump’s negotiation tactics now. It also knows that a disruption in oil exports out of the Strait of Hormuz and a rally in the oil price to $150 per barrel is the very last thing Trump wants. Iran has time to negotiate in calmness.”
Military Drills and Geopolitical Risk
The Iranian semi-official Fars news agency reported that Iran and Russia will carry out naval exercises in the Sea of Oman and the northern Indian Ocean on Thursday, following military drills conducted by the Revolutionary Guards in the Strait of Hormuz a few days earlier.
Political consultancy Eurasia Group said in a Tuesday note to clients that it assigns a 65% probability to U.S. military strikes against Iran by the end of April.
Inventory Data in Focus
Market participants are also monitoring upcoming U.S. inventory statistics. The American Petroleum Institute is scheduled to publish its weekly report later in the day, followed by data from the Energy Information Administration, the statistical division of the U.S. Department of Energy, on Thursday.
Analysts surveyed by Reuters estimated that U.S. crude stockpiles likely increased last week, while inventories of distillates and gasoline probably declined.
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