Oil prices finished little changed on Wednesday as a massive U.S. crude stock build failed to significantly ease market anxiety over the risk of military conflict between the United States and Iran. Brent crude settled up 8 cents at $70.85 a barrel, while U.S. West Texas Intermediate slipped 21 cents to $65.42. The muted price action reflected a tug-of-war between bearish inventory data and persistent geopolitical risk.
The U.S. Energy Information Administration reported that crude inventories surged by 16 million barrels last week, far exceeding analyst expectations for a 1.5-million-barrel build. The increase was driven by lower refinery utilization and higher imports. The report also showed a record adjustment factor of 2.7 million barrels per day, reflecting unaccounted-for supply changes.
Despite the bearish data, the impact on prices was limited as traders remain focused on Middle East tensions. In recent sessions, Brent and WTI have climbed to multi-month highs as the U.S. bolstered its military presence in the region in an effort to pressure Iran to curb its nuclear and ballistic missile programs.
President Donald Trump reiterated during his State of the Union address that Washington would not allow Iran to develop a nuclear weapon, keeping the threat of military action in play. A third round of talks between U.S. envoys and an Iranian delegation is scheduled for Thursday in Geneva. Iran’s foreign minister said a deal was “within reach” if diplomacy takes priority.
The key market question remains whether any escalation would materially disrupt Iranian oil production or exports. Iran is OPEC’s third-largest crude producer, and a significant disruption could tighten global supplies. However, traders note that Saudi Arabia could potentially raise output quickly to offset lost barrels, and a strong U.S. naval presence could help keep the Strait of Hormuz open.
In preparation for possible disruption, Saudi Arabia has reportedly activated contingency plans to temporarily boost output and exports. Meanwhile, OPEC+ is expected to consider increasing production by about 137,000 barrels per day in April as it begins unwinding a pause in supply hikes. Eight key OPEC+ producers are set to meet on March 1.
Adding to the uncertainty, U.S. trade policy remains in flux after a Supreme Court ruling reshaped elements of President Trump’s tariff program. A temporary 10% global tariff has taken effect, with signals that it could rise to 15% or higher for some countries, clouding the outlook for global growth and oil demand.