Daijiworld Media Network - New Delhi
New Delhi, Feb 23: Oil prices paused on Thursday after registering their biggest single-day gain in months, as escalating tensions involving Iran fuelled fears of possible supply disruptions from one of the world’s most crucial energy regions.
West Texas Intermediate (WTI) hovered near $65 a barrel after climbing 4.6 per cent in the previous session, marking its strongest jump since October. Brent crude, the global benchmark, closed above $70 a barrel for the first time in over two weeks, reflecting renewed geopolitical risk premiums in global oil markets.
The rally was triggered by reports indicating that the United States could move closer to military involvement in Iran, raising concerns of a broader regional conflict. Any escalation threatens supplies from the Middle East, which accounts for nearly one-third of global oil production. Traders remain cautious that disruptions due to sanctions, infrastructure damage or shipping risks could tighten global crude availability.
Despite the heightened tensions, diplomatic engagement continues. Iran signalled there had been preliminary alignment with Washington on the framework of a potential nuclear agreement, while US officials indicated further negotiations could be held in Geneva in the coming weeks. However, recent US visa restrictions on Iranian officials over domestic crackdowns have added strain to bilateral ties.
The geopolitical developments also carry domestic implications for Washington. Higher oil prices could push up fuel costs for American consumers, posing a political challenge ahead of upcoming mid-term elections.
Beyond the Middle East, other global factors are influencing oil’s trajectory. Efforts to secure a ceasefire in Ukraine ended inconclusively, prolonging uncertainty around Russian oil output. Russia, a key member of the OPEC+ alliance, has already shown signs of slowing production amid reduced drilling activity.
Meanwhile, US inventory data lent modest support to prices. Industry estimates indicated that crude stockpiles declined by about 609,000 barrels last week, signalling steady demand. Official government data due later in the day is expected to provide further direction to the markets.