Crude Oil Prices Near 7-Month Highs as U.S.-Iran Tensions Offset Inventory Concerns

Crude oil prices hovered near seven-month highs on Wednesday as escalating geopolitical tensions between the United States and Iran kept investors on edge, even as both sides prepared for another round of diplomatic talks. The market is balancing the risk of potential supply disruptions in the Middle East against signs of rising U.S. crude inventories, creating a volatile but resilient pricing environment.

Geopolitical Risks Support Crude Oil Prices

Brent crude futures were trading at US$71.22 per barrel, up 45 cents, or 0.64%, while U.S. West Texas Intermediate (WTI) rose 42 cents, or 0.64%, to US$66.05. Brent recently touched its highest level since late July, and WTI reached a peak not seen since early August.

Prices have remained elevated as Washington has deployed additional military forces to the Middle East, aiming to pressure Tehran into negotiating limits on its nuclear and ballistic missile programs. An extended conflict could disrupt exports from Iran, the third-largest crude producer in the Organization of the Petroleum Exporting Countries (OPEC), as well as from other key producers in the region.

U.S. envoys Steve Witkoff and Jared Kushner are scheduled to meet an Iranian delegation for a third round of talks in Geneva on Thursday. Iran’s Foreign Minister Abbas Araqchi said a deal was “within reach” if diplomacy prevails. 

Military Posturing Adds to Market Anxiety

Tensions have intensified amid reports that Iran and China are accelerating discussions over the purchase of Chinese anti-ship cruise missiles. Such weapons could potentially threaten U.S. naval forces stationed near Iran’s coastline, heightening the stakes in an already fragile standoff.

Trump is also expected to outline his Iran strategy in his upcoming State of the Union address, though details remain limited.

Inventory Build Tempers Bullish Momentum

Despite geopolitical support, oil markets are grappling with concerns about oversupply. The American Petroleum Institute reported a sharp 11.43 million-barrel increase in U.S. crude stockpiles for the week ended February 20. However, gasoline and distillate inventories reportedly declined, offering partial relief.

Official inventory data from the U.S. Energy Information Administration is due later Wednesday and could provide further direction.

Conclusion

For now, crude prices remain anchored by geopolitical risk, with diplomacy and supply data likely to dictate near-term price movements. Investors will closely watch both Thursday’s talks and the latest inventory figures for clearer signals on market direction.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.