BY COMFORT OGBONNA
Oil prices moved higher on Wednesday, supported by ongoing geopolitical tensions between the United States and Iran and fresh signs of tightening supply in key storage hubs. Investors kept a close watch on diplomatic developments while also assessing inventory data that pointed to stronger underlying demand.
Brent crude futures rose 98 cents, or 1.4%, to $69.78 a barrel by 0949 GMT. U.S. West Texas Intermediate crude gained 95 cents, nearly 1.5%, to trade at $64.91 per barrel. The gains reflected a combination of geopolitical risk premiums and improving physical market indicators.
Analysts noted that while tensions in the Middle East remain elevated, there has been no direct disruption to oil supply so far. UBS oil analyst Giovanni Staunovo said ongoing uncertainty in the region continues to lend support to prices, even in the absence of immediate production or shipping interruptions.
Diplomatic signals have been mixed. Iran’s foreign ministry spokesperson stated that recent nuclear talks with Washington allowed Tehran to assess the seriousness of the U.S. position and indicated there was sufficient common ground to continue negotiations. The comments suggested that both sides remain engaged in efforts to prevent renewed confrontation.
At the same time, U.S. President Donald Trump said he was considering deploying a second aircraft carrier to the Middle East, underscoring Washington’s readiness to project military strength in the region. The move comes as both countries prepare to resume negotiations aimed at preventing escalation over Iran’s nuclear and missile programs.
Market participants appear to be balancing the risk of confrontation against the possibility of a diplomatic breakthrough. Tamas Varga, an analyst at PVM Oil Associates, said that although rhetoric between the two sides can be forceful, there are currently no clear signs of imminent escalation. He added that the U.S. administration seems to believe Iran may ultimately seek a negotiated agreement.
Currency movements also played a role in supporting crude prices. A slightly weaker U.S. dollar made oil, which is priced in dollars, more affordable for buyers using other currencies. Typically, a stronger dollar dampens global demand for crude by increasing costs for foreign purchasers.
Beyond geopolitics and currency trends, supply-demand fundamentals have shown signs of tightening. Traders pointed to declining stockpiles in major storage hubs as evidence that the surplus seen in late 2025 may be easing. Crude draws from independently held inventories in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub, as well as from Fujairah in the United Arab Emirates, signaled a firmer physical market, according to UBS.
Still, attention is turning to official U.S. inventory data for further direction. The Energy Information Administration is set to release its weekly petroleum status report, which will provide a clearer picture of domestic supply trends. Preliminary data from the American Petroleum Institute indicated that U.S. crude inventories rose by 13.4 million barrels in the week ended February 6, a sizeable build that could temper bullish sentiment if confirmed.
For now, oil markets remain caught between geopolitical uncertainty and evolving supply-demand dynamics. While no immediate disruption has materialized, the combination of Middle East tensions, inventory fluctuations and currency movements continues to shape price action in a volatile global energy landscape.