Oil prices stabilized after their biggest daily gain since October, following a report that a US military intervention in Iran could happen sooner than expected.
Brent crude settled above $70 a barrel after adding 4.3% on Wednesday, while West Texas Intermediate crude traded above $65.
Axios reported that any US military operation would likely be a campaign lasting for weeks, and that the Israeli government is pushing for a scenario aimed at regime change in Iran.
Supply risks and US political considerations
A potential war could jeopardize oil flows from a region that pumps roughly a third of the world's oil. However, US President Donald Trump risks alienating voters ahead of this year's midterm elections if rising crude prices lead to higher gasoline prices in the United States.
Talks between the two sides have so far remained inconclusive, with Tehran saying it had reached a general agreement with Washington on the terms of a possible nuclear deal, while a US official said Iranian negotiators would return to Geneva with a new proposal within two weeks.
The United States also announced visa restrictions on Iranian officials and executives in response to a recent crackdown on protests.
Analysts at RBC Capital Markets, including Helima Croft, wrote in a note that the failure to resolve key areas of disagreement still favors another military confrontation.
Developments in Ukraine and US stockpiles
Outside the Middle East, talks to end the war in Ukraine ended after less than 90 minutes with little clarity. Meanwhile, Russia, a member of the OPEC+ alliance, has seen a slowdown in drilling operations that could lead to a further decline in oil production.
Separately, U.S. crude oil inventories fell by 609,000 barrels last week, according to the American Petroleum Institute. Official data is due on Thursday.
In the latest trading, Brent crude futures for April settlement rose 0.2% to $70.50 a barrel at 1:40 p.m. Singapore time, while West Texas Intermediate crude futures for March delivery, which expire on Friday, rose 0.3% to $65.38 a barrel, and the most actively traded April futures contract rose 0.3% to trade at $65.25 a barrel.
