Oil Holds Biggest Jump Since October on Iran Conflict Concerns
(Bloomberg) -- Oil steadied after its biggest daily gain since October, following a report that American military intervention in Iran could come sooner than expected.
Brent held above $70 a barrel after adding 4.3% on Wednesday, while West Texas Intermediate traded above $65. Axios reported that any US military operation would likely be a weeks-long campaign and that Israel’s government is pushing for a scenario targeting regime change in the Islamic Republic.
A potential war would put flows at risk from a region that pumps about a third of the world’s oil. However, US President Donald Trump risks angering voters ahead of mid-term elections this year if a spike in crude prices makes gasoline more expensive at the pump.
Talks between the sides so far have been inconclusive, with Tehran saying it reached a “general agreement” with Washington on the terms of a potential nuclear deal and an US official said Iranian negotiators would return to Geneva with a new proposal in two weeks. The US also announced visa restrictions on Iranian officials and executives over a recent crackdown on protests.
“The failure to resolve core areas of contention continues to tip the scales in favor of another military confrontation,” RBC Capital Markets analysts including Helima Croft said in a note.
Beyond the Middle East, talks to end the war in Ukraine ended after barely 90 minutes with little clarity. OPEC+ member Russia has seen a slowdown in drilling that may see oil production fall further.
Elsewhere, US crude inventories fell 609,000 barrels last week, according to the American Petroleum Institute. Official data is due on Thursday.
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