Brent Crude Rebounds on US-Iran Tensions

Brent crude oil futures fell to below $71 per barrel on Wednesday, extending losses for a third session after the US Energy Information Administration reported the largest weekly crude inventory rise in three years. US crude stocks jumped 15.989 million barrels to 435.8 million for the week ended February 20, far above the expected 1.5 million-barrel increase. Cushing, Oklahoma, inventories rose 881,000 barrels, distillates increased, and gasoline stocks declined. Also, a Hezbollah official said the group would not intervene in limited US strikes on Iran. Still, oil prices remain near seven-month highs as traders weigh the next US-Iran nuclear talks in Geneva on Thursday. President Donald Trump warned Iran is rebuilding its nuclear program, fueling speculation of potential US military action.

Brent crude oil futures rose above $71.2 per barrel on Wednesday, as traders balanced geopolitical supply risks against a massive build in US inventories. Ahead of Thursday's high-stakes nuclear talks in Geneva involving envoys Steve Witkoff and Jared Kushner, President Trump used his State of the Union address to warn of "very bad consequences" if Iran fails to meet "zero enrichment" demands. Adding to the tension, reports surfaced that Iran is seeking Chinese anti-ship cruise missiles to counter US naval presence near its coast. This geopolitical risk premium remains high despite the American Petroleum Institute reporting a significant 11.43 million barrel surge in US crude stockpiles last week. While global supply currently exceeds demand, the market remains fixated on potential disruptions in the Strait of Hormuz. Investors are now awaiting official EIA inventory data and the outcome of diplomacy to see if prices can sustain these seven-month highs.

Brent crude oil futures rose to around $71.1 per barrel on Wednesday after two consecutive sessions of decline, as investors weighed supply risks ahead of a third round of nuclear talks between the US and Iran. During his State of the Union address, President Trump reiterated his preference for a diplomatic solution but also accused Iran of working to rebuild its nuclear program and that the country is seeking to develop missiles capable of striking the US. Prior to this, Iran's deputy foreign minister said that his country will do "whatever it takes" to reach a deal with Washington. Attention is on the Strait of Hormuz, a critical chokepoint through which roughly 20% of the world’s oil passes, where any escalation in hostilities could significantly disrupt supply. Traders are also assessing the potential impact on demand from new US trade measures, as Trump’s 10% global tariff came into effect on Tuesday, with the administration working to raise it to 15%.