RoydadNaft –  Oil prices rose on Wednesday due to heightened risks stemming from the fragile state of U.S.-Iran negotiations, while signs of a shrinking supply surplus—thanks to stronger demand support from India—also helped bolster prices.

According to Roydad Naft, Brent crude futures rose 57 cents, or 0.83%, to $69.37 per barrel as of 07:11 GMT. U.S. WTI crude also gained 56 cents, or 0.88%, reaching $64.52.

LSEG analysts wrote in a report: “Oil continues to carry upside tail-risk as U.S.-Iran talks persist but remain fragile, maintaining the Strait of Hormuz risk premium due to ongoing sanctions pressure, tariff threats related to Iran’s trade, and increased U.S. military presence in the region.”

Iran’s Foreign Ministry spokesperson said on Tuesday that nuclear talks with the U.S. had allowed Tehran to gauge Washington’s seriousness and demonstrated sufficient consensus to continue the diplomatic path.

Iranian and U.S. diplomats held discussions in Oman last week aimed at reviving diplomacy, following U.S. President Donald Trump’s deployment of naval forces to the region, which raised concerns about potential new military action.

While oil prices initially fell after Oman’s Foreign Minister described the U.S.-Iran talks—with a senior Iranian security official—as constructive, hopes for a peaceful resolution later faded with reports that the U.S. might send a second aircraft carrier to the Middle East if negotiations fail, according to ANZ analysts in a note.

Trump said on Tuesday that he is considering deploying a second aircraft carrier to the Middle East, even as Washington and Tehran prepare to resume talks to prevent a new conflict.

In addition, signs of a reduced supply surplus supported oil prices, as markets absorbed some of the excess barrels observed in the final quarter of 2025.

“With mainstream floating oil stocks returning to normal levels and stronger demand for it in India, oil prices are likely to find support in the short term,” Vortexa market analyst Xavier Tang said.

Indian refiners are avoiding Russian oil purchases to help New Delhi finalize a trade deal with Washington, resulting in increased buying from the Middle East and West Africa.

Traders are also awaiting the weekly U.S. oil inventory data from the Energy Information Administration (EIA) on Wednesday.

Analysts polled by Reuters estimated on average that crude inventories rose by about 800,000 barrels in the week ending February 6, while distillate and gasoline stocks likely fell by around 1.3 million barrels and 400,000 barrels, respectively.

Market sources reported that U.S. crude inventories surged by 13.4 million barrels in the week ending February 6, based on American Petroleum Institute (API) figures released Tuesday.