Oil prices nudged higher as investors sized up the chances of a breakthrough in nuclear negotiations between the US and Iran, even as a significant American military deployment in the Middle East kept risk premiums alive.
West Texas Intermediate hovered near $66 a barrel after slipping about 1% in the previous session, while Brent settled below $71. The moves reflected a market caught between diplomatic optimism and geopolitical caution.
Military Posturing Keeps Nerves Frayed
In Washington, Secretary of State Marco Rubio and the director of the Central Intelligence Agency briefed senior lawmakers on Iran earlier this week, underscoring the seriousness of the moment. The Trump administration has ordered what officials describe as the largest US military build-up in the region since the 2003 Iraq war, dispatching two aircraft carriers and additional assets.
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According to CNN, citing a defense official, the US is also deploying 12 F-22 stealth fighter jets to Israel. The stepped-up presence has fueled speculation about potential conflict, even as President Donald Trump reiterated that he prefers a diplomatic resolution. He cautioned, however, that the absence of a deal would be “very bad” for Tehran.
Strait of Hormuz in Focus
Energy markets remain acutely sensitive to developments involving Iran. Any escalation could prompt Tehran to disrupt traffic through the Strait of Hormuz, a strategic chokepoint that carries roughly a quarter of the world's seaborne crude. Liquefied natural gas shipments also pass through the narrow corridor between Iran and the Arabian Peninsula, amplifying global supply risks.
Oil had rallied earlier this year on concerns about regional tensions, despite broader expectations that rising supplies could pressure prices. That tension between fundamentals and geopolitics continues to shape daily trading.
The next round of nuclear negotiations is scheduled for Thursday in Geneva. Trump's special envoy Steve Witkoff and Jared Kushner are expected to meet Iranian Foreign Minister Abbas Araghchi. Traders will be watching closely for signs of progress — or renewed friction — that could shift the balance in an already jittery market.
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