Oil prices slipped on Wednesday after Oman confirmed a new round of nuclear talks between the U.S. and Iran would take place later this week, dampening earlier gains tied to rising geopolitical tensions.
Brent crude fell 47 cents, or 0.7%, to close at $64.91 a barrel, while U.S. West Texas Intermediate dropped 46 cents, or 0.7%, to settle at $61.57.
Prices had moved higher earlier in the session following a CNN report suggesting Israel may be preparing to strike Iranian nuclear facilities. The report raised concerns about potential disruptions to Iranian oil exports, but those fears eased as diplomatic efforts appeared to regain momentum.
Iran, a top OPEC producer, remains central to market risk calculations. While a military conflict could impact its output or prompt retaliation in the Strait of Hormuz, analysts believe any short-term disruption—estimated at around 500,000 barrels per day—could likely be absorbed by OPEC+ adjustments.
Further pressure on prices came from unexpected builds in U.S. oil inventories. Government data showed crude stocks rose by 1.3 million barrels, while gasoline and distillate inventories increased by 800,000 and 600,000 barrels, respectively.
Additionally, Kazakhstan’s oil production edged 2% higher in May, defying broader OPEC+ efforts to limit global supply and adding to the bearish sentiment in the market.