RoydadNaft –  Oil prices increased on Thursday as investors focused on escalating tensions between the United States and Iran, with concerns that potential strikes on Tehran or disruptions to shipping routes could threaten global supply.

According to Roydad Naft, as of 6:07 a.m., Brent futures contracts gained 21 cents, or 0.30%, reaching $69.61 per barrel, while U.S. WTI crude rose 26 cents, or 0.40%, to $64.89 per barrel.

Both contracts closed higher on Wednesday—Brent up 0.87% and WTI up more than 1.05%—as fears of intensifying U.S.-Iran tensions overshadowed data showing rising U.S. crude inventories.

U.S.-Iran Tensions Rise Even as Talks Continue

Oil prices climbed after U.S. President Donald Trump stated on Wednesday, following a meeting with Israeli Prime Minister Benjamin Netanyahu, that no final agreement had been reached on next steps regarding Iran—though he stressed that negotiations with Tehran would continue.

The day before, Trump indicated that if no deal is reached with Iran, he is considering deploying a second aircraft carrier to the Middle East, while both sides prepare to resume discussions. U.S. and Iranian officials held indirect talks in Oman last week, but details on the timing and location of the next round have not yet been confirmed.

Vijay Valcha, Chief Investment Officer at Century Financial, said: “Although the American Petroleum Institute (API) reported a 13.4 million barrel increase in inventories last week, its impact was overshadowed by news reports indicating that the U.S. is considering seizing tankers carrying Iranian crude oil and plans to send another carrier strike group to the Middle East if talks on Iran’s nuclear program fail.”

He added: “Another layer of geopolitical risk premium has been added to oil markets; Netanyahu’s statements that ongoing talks with Iran must go beyond the nuclear program to include long-range weapons and the regional proxy network.”

Valcha explained that Iran produced around 3.3 million barrels per day in January, making it OPEC’s fourth-largest producer. Of that, 1.63 million barrels per day consisted of crude oil and condensate exports. Therefore, any escalation in tensions could disrupt these flows.

Valcha further noted: “Geopolitical tensions this year have driven a 10% increase in oil prices, even as longer-term fundamentals point to a supply surplus.”

U.S. employment growth in January exceeded expectations, with the unemployment rate falling to 4.3%, according to the Labor Department report, signaling underlying economic resilience. A stronger economy has supported expectations for sustained oil demand.

However, the oil price rise was capped by a sharp increase in U.S. crude inventories. The Energy Information Administration reported that inventories rose by 8.5 million barrels last week to 428.8 million barrels—far exceeding analysts’ expectations of a 793,000-barrel increase.