LONDON, February 4, 2026, 11:42 GMT — Regular session.
- Oil ticks up amid renewed U.S.-Iran tensions, reviving concerns over supply risks
- Attention remains fixed on shipping through the Strait of Hormuz and upcoming talks in Oman
- Traders are eyeing U.S. inventory data to gauge the next move in prices
Oil prices climbed Wednesday after the U.S. downed an Iranian drone and Iranian gunboats neared a U.S.-flagged tanker, keeping tensions high in the Gulf. Brent crude futures added 46 cents, or 0.7%, reaching $67.79 a barrel by 1034 GMT. U.S. West Texas Intermediate (WTI) crude rose 52 cents, or 0.8%, to $63.73. “Oil would be lower without Middle Eastern sabre-rattling,” said PVM analysts, as traders also digested a reported drop of over 11 million barrels in U.S. crude stocks last week from the American Petroleum Institute, ahead of official government figures due later Wednesday. 1
The tanker incident put the Strait of Hormuz under the spotlight. This narrow passage connects the Persian Gulf to the Gulf of Oman and the Arabian Sea. Most crude from OPEC members—Saudi Arabia, Iran, the UAE, Kuwait, and Iraq—flows through here, primarily heading to Asia. Any disruption risks blocking a key physical supply route. 2
Diplomats and traders are eyeing Friday’s scheduled U.S.-Iran talks in Oman, following Tehran’s request to change the venue and its insistence on keeping the discussion centered on its nuclear program, a regional official said. Meanwhile, U.S. Central Command reported that Iranian forces rapidly approached a U.S.-flagged tanker and threatened to board it, fueling concerns about rising tensions just days before the talks. 3
Despite the boost from geopolitical factors, oil faced headwinds elsewhere. Global stocks slipped Wednesday amid a selloff driven by worries over AI-driven disruption hitting software and data-analytics companies. That risk-off sentiment often puts a lid on commodity gains as traders pull back across the board. 4
Tuesday’s session set the pace. Brent rose $1.03, or 1.6%, closing at $67.33 a barrel, while WTI gained $1.07, or 1.7%, to settle at $63.21. This bounce came after both benchmarks dropped over 4% the previous day amid hopes of de-escalation. “The diplomatic effort to avoid a U.S. military strike in Iran is unravelling,” said Bob Yawger, director of energy futures at Mizuho. Ritterbusch and Associates noted that any near-term effects from changes in Russian flows might show up more as deeper discounts rather than outright supply cuts. 5
Trade developments caught attention as President Donald Trump declared a deal to slash U.S. tariffs on Indian goods from 50% down to 18%. In return, India agreed to stop buying Russian oil and reduce trade barriers. Trump also mentioned India would import oil from the U.S. and possibly Venezuela — news that sparked a short-lived boost in demand expectations and shifted trade patterns. 6
Inventories are the next key milestone. The U.S. Energy Information Administration will release its Weekly Petroleum Status Report on Feb. 4, after 10:30 a.m. ET. Traders rely on this report for a quick snapshot of supply levels, refinery activity, and implied demand. 7
However, those same drivers pushing crude higher can just as swiftly pull it down. If Oman tones down its rhetoric or U.S. stockpiles come in stronger than expected, the risk premium could evaporate fast, leaving prices scrambling for clearer demand cues.
