Photo: Simone Augstburger/Shutterstock
By Alex Longley and Mia Gindis (Bloomberg) –Oil gained the most since October as traders weighed whether talks between the US and Iran will be enough to avert conflict, following a report that American military intervention could come sooner than expected.
West Texas Intermediate was up 4.6% to settle near $65 a barrel, while Brent crude closed above $70 for the first time in over two weeks. Axios reported that any US military operation would likely be a weeks-long campaign, rather than the pinpoint operation that took place in Venezuela last month. Israel’s government is pushing for a scenario targeting regime change, the report added.
A potential conflagration would put crude flows at risk in the Strait of Hormuz – the choke point for energy exports from the world’s top oil-producing region that Iran said on Tuesday it would briefly close for military drills. 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.
“I’m a cynic and still don’t believe Trump would risk higher pump prices at home in an election year where affordability is high on the agenda,” said Ole Sloth Hansen, head of commodities strategy at Saxo Bank, adding the Axios report was driving up prices on Wednesday.
Talks so far have been inconclusive, with Tehran saying it reached a “general agreement” with Washington on the terms of a potential nuclear deal. A US official said Iranian negotiators would return to Geneva with a new proposal in two weeks. The US on Wednesday announced visa restrictions on Iranian officials and executives for repressing recent anti-regime protests and cutting off internet access.
“The readout from US-Iran talks in Geneva indicates that the diplomatic track is nearing a dead end,” Rapidan Energy Group wrote in a note. The firm assigned higher odds of 30%, up from 20%, that an Iranian retaliation to potential US strikes on the major oil producer would result in a substantial disruption in Gulf energy flows.
Meanwhile, a second day of US-brokered meetings in Geneva between Russia and Ukraine broke up after barely 90 minutes as Ukrainian President Volodymyr Zelenskiy accused Moscow of attempting to prolong the process. The head of Russia’s delegation said talks were difficult and businesslike, adding the next meeting will take place soon.
Crude has benefited so far this year from strong cross-commodity momentum, as well as geopolitical concerns that have outweighed warnings that a global glut in the market will drag down prices. The standoff with Iran — which was rocked by anti-government protests in January — has fanned concerns among traders that oil output or vital supply routes could be interrupted by military clashes.
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© 2026 Bloomberg L.P.
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Tension in one of the world’s most critical maritime chokepoints spiked this week after Iran temporarily restricted parts of the Strait of Hormuz during live-fire military exercises, a move that underscored how quickly geopolitics can ripple through global shipping markets even without a full blockade.
Parts of the Strait of Hormuz, one of the world’s most important oil-shipping lanes, will be closed for “several hours” on Tuesday as part of Iran’s military drills, state TV in the Islamic Republic reported.
Cargo volumes along Russia’s Northern Sea Route fell in 2025, underscoring how Western sanctions are increasingly curtailing Moscow’s long-held ambitions to transform the Arctic passage into a global energy export corridor.
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