International crude oil prices jumped more than 4 per cent on Wednesday amid rising geopolitical tensions after U.S. Vice President JD Vance said Iran had failed to meet key U.S. demands in nuclear negotiations and maintained that the United States reserves the right to use military force if diplomacy fails.
Brent crude, the global benchmark, rose about 4.35 per cent to settle near $70.35 per barrel, while U.S. West Texas Intermediate (WTI) crude climbed 4.59 per cent to close around $65.19.
Diplomatic Deadlock and Market Reaction
Vance made his comments following nuclear talks between U.S. envoys and Iranian officials in Geneva this week. Although Iranian Foreign Minister Abbas Araghchi described the talks as “constructive” with basic principles agreed, the United States expressed dissatisfaction, saying Tehran did not fully address Washington’s “red lines.”
Oil traders reacted strongly to the comments, interpreting them as an indication that negotiations might stall, increasing fears of a broader geopolitical conflict that could disrupt global oil supplies.
Strait of Hormuz Concerns
Heightened tensions were further underscored by military activity in the region. Iran’s Revolutionary Guard reportedly conducted live military exercises near the Strait of Hormuz, a critical chokepoint for global oil shipments, though normal traffic was not disrupted at the time.
Analysts said the possibility of conflict has added a geopolitical risk premium to oil prices as traders price in the potential for supply interruptions.
Broader Market Impacts
The price surge comes after oil markets showed limited movement earlier in the week as investors weighed diplomatic developments in Geneva against unresolved tensions. Despite signs of progress in talks reported by both sides, the lack of substantive agreement on core issues has kept supplies and prices sensitive to political developments.
Beyond crude, other safe-haven assets such as gold also saw gains as investor caution grew.
