（Singapore, 25.02.2026）Oil prices are hovering near seven-month highs as tensions between the United States and Iran intensify ahead of a fresh round of talks in Geneva, keeping investors on edge over the risk of supply disruptions in the Middle East.
Brent crude futures were trading at around US$71.22 per barrel on Wednesday morning in Asia, up 45 cents or 0.64%. Meanwhile, U.S. West Texas Intermediate (WTI) crude rose 42 cents, or 0.64%, to US$66.05 per barrel.
Both benchmarks have recently touched their highest levels since late July and early August last year. Prices have remained elevated as Washington reinforces its military presence in the Middle East, in a move widely seen as an effort to pressure Tehran into reaching a deal over its nuclear and ballistic missile programmes.
Talks and Rising Military Tensions
The latest boost to oil prices comes as U.S. envoys Steve Witkoff and Jared Kushner prepare to meet an Iranian delegation on Thursday in Geneva. It will be the third round of negotiations between the two sides.
Iran’s Foreign Minister Abbas Araqchi said on Tuesday that a deal with Washington was “within reach”, but stressed that diplomacy must be given priority.
However, uncertainty remains high. U.S. President Donald Trump has warned of “very bad consequences” if a deal is not reached. Analysts say a key sticking point could be Washington’s demand for “zero enrichment” of uranium by Iran — a red line that Tehran may find difficult to accept.
Tony Sycamore, a market analyst at IG, noted that investors are closely watching whether Iran’s concessions will satisfy the U.S. position. Any sign that talks are breaking down could quickly push oil prices even higher.
The Middle East accounts for a significant portion of global oil supply. Iran is the third-largest crude producer in the Organization of the Petroleum Exporting Countries (OPEC). An extended conflict could disrupt not only Iranian exports but also shipments from neighbouring producers if the region becomes unstable.
Adding to tensions, Reuters reported that Iran and China have accelerated discussions over the possible purchase of Chinese anti-ship cruise missiles. Such weapons could potentially target U.S. naval forces positioned near the Iranian coast, raising the stakes of any confrontation.
Experts warn that the introduction of advanced anti-ship missiles would strengthen Iran’s defensive and offensive capabilities, particularly in the strategic Strait of Hormuz — a critical chokepoint for global oil shipments.
At the same time, debate is intensifying in Washington over the risks of military action.
According to the BBC, President Trump has dismissed reports suggesting that America’s top military officer urged caution over potential air strikes on Iran.
The reports said the Chairman of the Joint Chiefs of Staff, Air Force General Dan Caine, had warned that attacking Iran could be risky and might drag the U.S. into a prolonged regional conflict. There were also concerns that Iranian proxies could retaliate, potentially widening the crisis.
In a post on Truth Social, Trump described those reports as “fake news”. He said that while General Caine would prefer to avoid war, he believed that if military action were ordered, it would be “easily won”.
The U.S. has significantly reinforced its forces in the region in recent weeks. According to BBC reporting, one of the largest military build-ups in decades is underway, including aircraft carriers, refuelling aircraft and naval assets.
Ship-tracking data confirmed that the USS Gerald R. Ford, the world’s largest warship, passed through the Strait of Gibraltar toward the Mediterranean. It is believed to be heading toward the Middle East, where another carrier, the USS Abraham Lincoln, has also been tracked.
Military experts say this build-up provides the U.S. with greater operational depth and flexibility should tensions escalate further.
Supply Concerns and Inventory Pressure
While geopolitical risks are supporting prices, the oil market is also facing pressure from rising supply.
According to market sources citing data from the American Petroleum Institute (API), U.S. crude inventories surged by 11.43 million barrels in the week ended February 20. That is a much larger-than-expected build and could signal that global supply is currently exceeding demand.
However, the same data showed declines in gasoline and distillate stockpiles, which may indicate stronger fuel consumption.
Official figures from the U.S. Energy Information Administration (EIA) are due later on Wednesday and could provide clearer direction for prices.
For now, oil traders are balancing two powerful forces: the risk of a geopolitical shock in the Middle East and signs of oversupply in the United States.
If diplomacy progresses and tensions ease, oil prices could retreat from their recent highs. But if talks collapse or military action becomes more likely, the market could see a sharp spike — particularly if shipping routes or production facilities are threatened.
With Brent hovering near US$71 and WTI above US$66, energy markets remain highly sensitive to headlines. The outcome of Thursday’s talks in Geneva may determine whether prices stabilise or move even higher in the days ahead.
