Crude Oil Prices Edge Higher Amid U.S.-Iran Tensions and Inventory Surge

Crude oil prices climbed on Thursday, maintaining levels close to seven-month highs as investors closely watched diplomatic efforts between the U.S. and Iran. Hopes of averting a military confrontation in the Middle East helped keep markets buoyant, though a sharp rise in U.S. crude inventories capped gains.

Brent and WTI Hold Firm Near Multi-Month Highs

Brent crude futures rose 27 cents, or 0.3%, to US$71.12 a barrel at 01:23 GMT, while West Texas Intermediate (WTI) gained 23 cents, or 0.4%, to US$65.65. Both benchmarks have hovered near their highest levels since late July, reflecting market nervousness over potential supply disruptions. 

On Wednesday, Brent gained 8 cents while WTI slipped 21 cents, showing investors’ mixed sentiment amid geopolitical and supply factors.

Supply Risks and OPEC+ Strategy

Tensions have prompted Saudi Arabia to prepare contingency plans to boost oil exports in case of supply disruptions from Iran, the third-largest producer in OPEC. Meanwhile, OPEC+ is reportedly considering a modest output increase of 137,000 barrels per day for April to meet peak summer demand and offset market volatility.

Rising U.S. Inventories Cap Gains

According to the U.S. Energy Information Administration, U.S. crude stockpiles rose by 16 million barrels last week (the largest build in 3 years) limiting upward momentum in prices.

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Conclusion

While geopolitical uncertainty continues to support oil prices, rising inventories and potential output increases from OPEC+ may restrain further gains. Markets remain on edge as the world awaits the outcome of U.S.-Iran diplomacy, which could define oil’s next move.

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