Oil prices rose by more than 3% on Wednesday as traders priced in potential supply disruptions amid concerns of conflict between the United States and Iran, and after talks between Ukraine and Russia in Geneva ended without a breakthrough.

Brent crude oil futures were up $2.38, or 3.53%, at $69.80 a barrel at 12:09 p.m. EDT, while U.S. West Texas Intermediate (WTI) crude futures gained $2.39, or 3.83%, to $64.72. Both contracts fell to two-week lows on Tuesday.

“The big moves in oil prices today are being solely driven by geopolitics, they continue to react to headlines with respect to meetings between the U.S. and Iran, and Russia and Ukraine,” said Andrew Lipow, president of Lipow Oil Associates.

“The oil market is pricing in additional risk of a supply disruption,” he added.

Oil’s drop on Tuesday followed hopes that tensions between the U.S. and Iran were easing after Iran’s foreign minister said the countries had reached an understanding on the main guiding principles of their nuclear talks.

But on Wednesday, the Iranian semi-official Fars news agency reported that Iran and Russia will conduct navy drills in the Sea of Oman and the northern Indian Ocean on Thursday.

Just as the talks began on Tuesday, Iranian state media said Iran was temporarily shutting parts of the Strait of Hormuz, a vital global oil supply route, due to security precautions while its elite Revolutionary Guards conducted military drills there. Later, state media said the strait had been shut for a few hours, without making it clear if it had fully reopened.

“Iran knows Trump’s negotiation tactics now. It also knows that a disruption in oil exports out of the Strait of Hormuz and a rally in oil prices to $150 per barrel is the very last thing Trump wants,” said SEB chief commodities analyst Bjarne Schieldrop in a note. “Iran has time to negotiate in calmness.”

Political consultancy Eurasia Group said in a Tuesday note to clients that it thinks there is a 65% probability of U.S. military strikes against Iran by the end of April.

“Everyone is monitoring the amount of military equipment that is flooding the region from the U.S., giving an indication that hostilities are imminent,” said John Kilduff, partner with Again Capital.

Russia, Ukraine Peace Talks End Without Breakthrough

Two days of peace talks in Geneva between Ukraine and Russia ended on Wednesday without a breakthrough, with President Volodymyr Zelenskiy accusing Moscow of stalling U.S.-mediated efforts to end the four-year-old war.

Ukraine has faced repeated pressure from U.S. President Donald Trump to agree to a deal that could mean painful concessions, as Russian forces pound its power grid and slowly advance on the battlefield.

Zelenskiy described the talks as “difficult.”

“There has been a renewed effort to clamp down on Russian exports, so if these talks do go off the rails as Zelenskiy suggested they are, then we could finally see a material drop in the amount of Russian exports headed to the global market, and that is obviously supportive,” said Again Capital’s Kilduff.

Meanwhile, U.S. oil inventory reports from the American Petroleum Institute, due later in the day, and from the Energy Information Administration on Thursday will also be in focus. Analysts polled by Reuters expect U.S. crude stockpiles likely rose last week.

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(Reporting by Georgina McCartney in Houston Siddharth Cavale in New York, Stephanie Kelly and Alex Lawler in London, Mohi Narayan in New Delhi and Katya Golubkova in Tokyo. Editing by Mark Potter, Kirsten Donovan)