Oil prices erased earlier losses and steadied Wednesday amid intensifying geopolitical tensions tied to unrest in Iran and unfolding U.S. policy responses. Brent crude traded above $65 a barrel, holding onto gains after topping the previous four sessions with more than a 9% rally, driven largely by concerns over the potential impact of civil unrest on Iranian oil supplies.
Market attention has been especially focused on reports that some U.S. personnel have been advised to leave the Al Udeid Air Base in Qatar by Wednesday evening, a precautionary posture shift amid regional frictions. The base was struck last year by Iranian forces in retaliation against U.S. strikes, underscoring its symbolic as well as strategic importance.
The heightened oil price sensitivity comes as U.S. President Donald Trump publicly urged Iranians to continue protesting against the regime of Supreme Leader Ayatollah Ali Khamenei, while indicating that future U.S. action would depend on further assessment of the protests’ human toll. Trump said he would “act accordingly” after gaining a clearer picture of casualties among demonstrators. Meanwhile, the National Security Council held preparatory meetings on possible responses, even in the president’s absence, according to a Washington Post report.
Traders on global commodity markets are parsing every development for clues about potential shifts in physical oil flows, given that Iran remains a significant producer with around 3.3 to 3.5 million barrels per day of crude
U.S. Energy Secretary Chris Wright added to the discourse by stating on Fox News that the U.S. would “happily be a commercial partner” for Iranian crude if the regime were to fall, a remark that signals Washington’s broader economic and energy interests amid the crisis.
The sharp focus on Iran reflects both its role in the Organization of the Petroleum Exporting Countries and the market’s recent recalibration after a lengthy glut. Oil has faced downward pressure for much of the last year amid expectations of oversupply; the current rally caught many bearish traders off guard as geopolitical risk once again dominated fundamentals.
Iran’s domestic turmoil has prompted further international reactions, including new sanctions from the United Kingdom targeting key economic sectors, and Iranian warnings to neighboring states that U.S. bases could be targeted if Washington intervenes militarily. According to rights groups, more than 2,600 people have been killed in the protests, raising the stakes for both domestic stability and international engagement.
Beyond pure geopolitics, technical factors are also at play. Oil markets entered the year with significant short speculative positioning, and annual index rebalancing has mechanically boosted demand for oil futures. This combination magnified price reactions as risk perceptions shifted.
However, physical market indicators remain mixed. An industry report from the American Petroleum Institute showed U.S. crude stocks climbed by around 5.3 million barrels last week, the largest build in roughly two months if confirmed by official data — suggesting that immediate supply concerns are not yet reflected in inventories. Gasoline and distillate stockpiles also rose in the same snapshot.
Analysts caution that while prices may continue to reflect a heightened geopolitical risk premium, structural oversupply pressures from resurgent Venezuelan exports and overall global output capacity could temper a sustained breakout. Some forecasts even project Brent nearing resistance around $68 if conflict fears remain elevated, though long-term equilibrium will depend on whether Iranian production or export infrastructure is materially disrupted.
