Oil Prices Rise Amid US-Iran Risk Escalation

• Prices climb on threat of US-Iran talks collapsing
• Rising US inventories cap upside potential for quotes
• India ramps up oil imports from the Persian Gulf
• Market reports from OPEC and IEA anticipated

The global oil market presented a mixed picture on Wednesday, with Brent crude prices trading above the $69 per barrel mark.

The rise in quotes was primarily driven by escalating geopolitical risks linked to the fragile negotiations between the US and Iran. The threat of Washington deploying a second carrier strike group should dialogue fail continues to underpin a significant risk premium, particularly concerning the security of key shipping straits.

Simultaneously, fundamental indicators are exerting substantial pressure on the market. US inventory data, showing the largest weekly build since November 2023, reminded investors of supply-side pressures. This factor restrained more aggressive price gains.

The market found additional support from signals of improving demand, notably reports of Indian refineries switching to crude from the Persian Gulf and West Africa. This shift helps absorb some of the market surplus.

In the short term, traders' focus will be on official US inventory data, as well as the upcoming market reports from OPEC and the International Energy Agency (IEA). The IEA's forecasts, which warn of a significant supply overhang forming this year, could set a more cautious tone for the market in the coming days.