Oil Prices Rise on U.S.-Iran Tensions

Oil prices steadied on Wednesday after rising earlier in the session after the U.S. shot down an Iranian drone and armed Iranian boats approached a U.S.-flagged vessel, rekindling fears of an escalation in tensions ahead of planned talks.

But a broader selloff of software equities, which often move in tandem with oil prices, capped gains.

Brent crude oil futures were up around 0.1% at $67.38 a barrel by 1423 GMT. U.S. West Texas Intermediate crude was down 2 cents at $63.19.

Both benchmarks have seesawed this week between news of talks to de-escalate tensions between the United States 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 are 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.

(Reuters)