Oil prices softened in early Asian trading on Thursday, after a notable 4% increase the day prior, as investors evaluated the ongoing attempts by the U.S. and Iran to mitigate tensions, amidst heightened military activity in the crucial oil-producing region. Brent futures declined by 12 cents, representing a 0.2% decrease, settling at $70.23 per barrel by 0110. Meanwhile, U.S. West Texas Intermediate crude experienced a drop of 8 cents, or 0.1%, trading at $65.11 per barrel. Both benchmarks settled more than 4% higher on Wednesday, marking their highest settlements since January 30, as traders factored in potential supply disruptions amid concerns regarding the U.S.-Iran conflict. Tensions between Washington and Tehran remain elevated; however, the consensus suggests that a full-scale armed conflict is improbable, leading to a cautious wait-and-see strategy,” stated Hiroyuki Kikukawa. U.S. President Donald Trump is opposed to a significant increase in crude prices, and should military action take place, it would probably be confined to brief air strikes,” Kikukawa noted.

Some progress was noted in the discussions regarding Iran in Geneva this week; however, significant gaps persisted on certain matters, according to the White House’s statement on Wednesday. It was also indicated that Tehran is anticipated to provide further details in the coming weeks. Iran has issued a notice to airmen indicating plans for rocket launches in regions throughout its southern territory on Thursday, scheduled from 0330 to 1330, as reported. Simultaneously, the U.S. has positioned warships in proximity to Iran, with U.S. Vice President JD Vance indicating that Washington is considering whether to maintain diplomatic engagement with Tehran or explore “another option.”

Satellite images indicate that Iran has recently constructed a concrete shield over a new facility at a sensitive military site, subsequently covering it with soil, according to experts. This development marks progress at a location that was reportedly bombed by Israel in 2024. In the interim, the recent two-day peace negotiations held in Geneva between Ukraine and Russia concluded on Wednesday without achieving a significant breakthrough. Ukrainian President Volodymyr Zelenskiy has accused Moscow of obstructing U.S.-mediated initiatives aimed at resolving the ongoing four-year conflict.

Last week, U.S. crude, gasoline, and distillate inventories experienced a decline, according to market sources referencing figures from the American Petroleum Institute on Wednesday. This outcome was contrary to the expectations set by a poll, which anticipated an increase of 2.1 million barrels in crude stocks for the week ending February 13. The Energy Information Administration is set to release the official U.S. oil inventory reports on Thursday.