Oil prices rose more than 4% on Wednesday after Vice President J.D. Vance said Iran had not mentioned the U.S. red line in this week’s nuclear negotiations and that President Donald Trump reserved the right to use military force.
usa crude oil Crude oil prices rose $2.86, or 4.59%, to close at $65.19 per barrel. global benchmark brent It rose $2.93 (4.35%) to settle at $70.35 per barrel.
U.S. special envoys Steve Witkoff and Jared Kushner held nuclear talks with Iran in Geneva on Tuesday. Iranian Foreign Minister Abbas Araghchi said the talks were “constructive”, according to Iranian media. Araguchi said that general agreement on the guiding principles was reached at this meeting.
Oil prices closed lower on Tuesday as traders interpreted the foreign minister’s remarks as a sign that the US and Iran could still reach a settlement.
But Vance said the Iranian government has not met the United States’ core demands.
“In some ways it worked out well. We agreed to meet after that,” the vice president told Fox News on Tuesday evening. “But in another sense, it’s very clear that the president has set some red lines that the Iranian people are not yet willing to really acknowledge and address.”
Vance said President Trump reserves the right to use force if diplomacy is not successful in stopping Iran’s nuclear program. “We have a very strong military, and the president has shown a willingness to utilize it,” the vice president told Fox News.
Meanwhile, sources told Axios last week that the U.S. military action against Iran is likely to be large-scale and more like a full-scale war than the one that captured Venezuelan President Nicolas Maduro in January.
Iran’s Revolutionary Guards this week conducted war exercises in the Strait of Hormuz, a key trade gateway for global oil flows. About a third of floating crude oil exports pass through the narrow waterway, according to data from energy consulting firm Kpler.
Markets are concerned that these oil flows could be disrupted if the U.S. and Iran go to war. Iranian state media said traffic was closed in parts of the strait on Tuesday due to military exercises.
Kepler did not observe any traffic outages in the Strait on Tuesday, said Matt Smith, the company’s oil analyst.
President Trump has stationed the aircraft carrier Abraham Lincoln in the Middle East. USS Gerald Ford is heading to the area.
President Trump said Friday he would send a second aircraft carrier in case negotiations fail. “If there’s no deal, we need a deal,” the president told reporters outside the White House.
The Iranian government did not immediately respond to CNBC’s request for comment.
