is trading with a clear geopolitical overlay, as markets recalibrate risk exposure ahead of U.S.-Iran talks while acknowledging the growing military footprint in the Middle East. is up 0.3% at $70.79 a barrel and WTI is 0.3% higher at $65.59, a modest rebound after both benchmarks closed lower in the previous session on hopes that diplomacy could ease tensions.
The prior pullback reflected tentative confidence that negotiations may reduce the probability of disruption. However, the continued build-up of U.S. military assets in the region has prevented a deeper correction, reinforcing a tangible risk premium in current pricing. Energy markets are effectively balancing two opposing signals: diplomatic intent versus strategic deterrence.
In his State of the Union address, President Trump stated a preference for a diplomatic resolution with Iran but reiterated that the U.S. would never allow Tehran to obtain a nuclear weapon. That formulation leaves room for negotiation while keeping the threat of action on the table. For oil traders, this dual message sustains volatility because it limits conviction in either a de-escalation narrative or a conflict-driven spike.
The result is a market that is not pricing immediate supply disruption, yet is unwilling to discount it entirely. The 0.3% intraday gains indicate sensitivity rather than directional momentum, suggesting positioning adjustments rather than a structural shift in fundamentals.
The base case remains continued diplomatic engagement, which would likely cap upside and keep Brent near $70.79 and WTI near $65.59 absent material supply loss. The risk scenario centers on escalation following the military build-up, which would rapidly reprice geopolitical risk and widen the premium embedded in both benchmarks.
Investors will watch the tone and substance of U.S.-Iran discussions and any change in military posture for confirmation of direction. Until clarity emerges, crude is likely to remain headline-driven, with price action reflecting shifts in perceived probabilities rather than changes in physical supply.
