Oil prices rose more than 2 per cent on Wednesday as traders continued to assess simmering tensions between the US and Iran.
Brent, the global benchmark for crude, was up 2.63 per cent at $70.61 as of 6.30pm in the UAE. West Texas Intermediate, which tracks US crude, rose 2.80 per cent at $65.75 a barrel.
Oil prices are up amid risks of a flare-up in tensions between Washington and Tehran, said Vijay Valecha, chief investment officer of Century Financial.
“Iran produced approximately 3.3 million barrels per day in January, making it the fourth-largest Opec producer … Thus, any escalation in tensions could impact these oil flows,” he said.
“This year, geopolitical tensions have led to a 10 per cent increase in oil prices, even though long-term fundamentals point to a supply glut,” he added.
US President Donald Trump recently warned the country would do “something very tough” if Washington and Tehran do not reach an agreement on Iran's nuclear capabilities. Mr Trump has also warned the US could send a second aircraft carrier to the Middle East, Axios reported.
“The Iranians really want to make a deal. Either we make a deal, or we have to do something very tough – like last time,” he during an interview with Fox Business, referring to US strikes on Iran's nuclear sites in June.
Meanwhile, the Wall Street Journal reported the US is considering seizing more Iranian oil tankers to pressure Tehran, although they fear doing so could disrupt global oil markets.
Mr Trump is also scheduled to host Israeli Prime Minister Benjamin Netanyahu at the White House later on Wednesday.
Ahead of the bilateral, Mr Netanyahu's office said he was briefed by Mr Trump's advisers on indirect talks between the US and Iran held in Oman last week.
The US wants Iran to abandon its nuclear programme, end support for its proxy groups in the Middle East and curb the number and range of its ballistic missiles. Iran, which wants relief from a sanctions programme that has shattered the country's economy, said its right to nuclear enrichment is non-negotiable.
