Oil Prices Climb 3% on US-Iran Talk Jitters

By Adedapo Adesanya

Oil prices surged about 3 per cent on Wednesday after it was reported that planned talks between the United States and Iran on Friday could collapse.

Brent futures grew by $2.13 or 3.16 per cent to $69.46 a barrel, while the US West Texas Intermediate (WTI) futures gained $1.93 or 3.05 per cent to trade at $65.14 per barrel.

The US and Iran had agreed to meet on Friday in Istanbul, with other Middle Eastern countries participating as observers.

However, the Iranians said on Tuesday that they wanted to move the talks to Oman and hold them in a bilateral format, to ensure that they focused only on nuclear issues and not other matters like missiles that are priorities for the US and countries in the region.

US officials were at first open to the request to change the location but then rejected it.

Later, the talks scheduled for Friday were back on, after several Middle Eastern leaders urgently lobbied the Trump administration on Wednesday afternoon not to follow through on threats to walk away.

The talks will be held in Muscat, the capital of Oman, on Friday.

The tensions between the US and Iran and heightened fears of potential disruption to oil flows through the Strait of Hormuz, where 20 per cent of the world’s oil supply passes through.

Members of the Organisation of the Petroleum Exporting Countries (OPEC) such as Saudi Arabia, Iran, the United Arab Emirates, Kuwait and Iraq export most of their crude via the strait.

Recall that the US military on Tuesday shot down an Iranian drone that aggressively approached a US aircraft carrier in the Arabian Sea. Separately, a group of Iranian gunboats approached a US-flagged tanker north of Oman.

The US Energy Information Administration (EIA) said on Wednesday that US crude stocks fell last week as a winter storm gripped large swaths of the country.

US crude oil inventories fell by 3.5 million barrels to 420.3 million barrels last week, as oil output slid to the lowest level since November 2024, the EIA said.

The EIA’s data release follows figures by the American Petroleum Institute (API) that were released a day earlier, which suggested that crude oil inventories fell by a colossal 11.1 million barrels.