Oil prices climbed about 3% on Wednesday on a report that the U.S. would not agree to change the location and format of talks with Iran planned for Friday.

Brent futures rose $2.06, or 3.06%, to $69.39 a barrel at 1:09 p.m. EST (1809 GMT), while U.S. West Texas Intermediate (WTI) crude rose $1.93, or 3.05%, to $65.14.

The U.S. has decided to reject Iran’s request to change the  location of talks planned for Friday, Axios reported on Wednesday, citing two U.S. officials.

Tehran is “fully ready to hold talks with U.S. only on nuclear issue,” a senior Iranian official told Reuters on Wednesday.

Both crude benchmarks have seesawed this week between news of talks to de-escalate tensions between the U.S. and Iran and heightened fears of potential disruption to oil flows through the Strait of Hormuz.

“Oil would be lower without Middle Eastern sabre-rattling,” PVM analysts said in a note.

The U.S. military on Tuesday shot down an Iranian drone that “aggressively” approached a U.S. aircraft carrier in the Arabian Sea, the U.S. military said.

Separately, a group of Iranian gunboats approached a U.S.-flagged tanker north of Oman, maritime sources and a security consultancy said. The U.S. and Iran were due to hold talks in Oman on Friday, according to a regional official.

OPEC members Saudi Arabia, Iran, the United Arab Emirates, Kuwait and Iraq export most of their crude via the Strait of Hormuz, mainly to Asia.

Meanwhile, India’s Russian oil imports slipped in January, continuing a downturn that began in December, as refiners sought alternative sources due to Western sanctions pressure and ongoing U.S.–India trade talks, Reuters sources said and data showed.

Crude Oil Inventories Fall

The U.S. Energy Information Administration said on Wednesday that U.S. crude stocks fell last week as a winter storm gripped large swaths of the country.

U.S. crude oil inventories fell by 3.5 million barrels to 420.3 million barrels last week, as oil output slid to the lowest level since November 2024, the EIA said, compared with analysts’ expectations in a Reuters poll for a 489,000-barrel rise.

The gains from the oil inventories draw were likely limited as the decline was not as large as the more than 11 million-barrel decline estimated by the American Petroleum Institute on Tuesday, said Phil Flynn, senior analyst with Price Futures Group. [API/S]

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(Reporting by Nicole Jao in New York; Additional reporting by Scott DiSavino and Shariq Khan in New York, Shadia Nasralla in London, Yuka Obayashi in Tokyo and Jeslyn Lerh in Singapore; Editing by David Holmes and Matthew Lewis)