Oil prices near multi-month high on Iran war fears

Oil prices stabilized after recording their biggest one-day gain since October, as concerns intensified that the United States could intervene militarily in Iran sooner than anticipated.

Brent crude remained above $70 a barrel after climbing 4.3% on Wednesday, while West Texas Intermediate traded above $65, News.Az reports, citing Bloomberg.

According to Axios, any potential US military action could develop into a weeks-long campaign, with Israel reportedly advocating for an outcome aimed at regime change in the Islamic Republic.

A possible conflict threatens oil supplies from a region responsible for roughly one-third of global crude production. However, US President Donald Trump faces political risks ahead of this year’s mid-term elections, as a sharp rise in oil prices could translate into higher gasoline costs for American consumers.

Diplomatic efforts have so far produced limited results. Tehran stated it had reached a “general agreement” with Washington on the framework of a potential nuclear deal, while a US official indicated that Iranian negotiators would return to Geneva within two weeks with a revised proposal. Meanwhile, Washington imposed visa restrictions on Iranian officials and executives following a recent crackdown on protests.

Analysts at RBC Capital Markets, including Helima Croft, noted in a research note that unresolved core disagreements continue to increase the likelihood of renewed military confrontation.

Outside the Middle East, efforts to negotiate an end to the war in Ukraine concluded after less than 90 minutes, yielding little progress. Russia, a member of OPEC+, has also experienced a slowdown in drilling activity that could lead to further declines in oil output.

In the United States, crude inventories fell by 609,000 barrels last week, according to the American Petroleum Institute. Official government data is scheduled for release on Thursday.

News.Az 

By Nijat Babayev