Heightened geopolitical tensions, following the U.S. military's downing of an Iranian drone near an American aircraft carrier in the Arabian Sea, have propelled oil prices upward for a second consecutive day.

After a 1.7% gain on Tuesday, WTI crude advanced further on Wednesday, approaching $64 per barrel, while Brent crude settled above $67.

Although the incident has unsettled oil markets, President Trump reiterated that diplomatic dialogue between the nations continues, a point confirmed by White House Press Secretary Caroline Levitt, who stated that U.S.-Iran negotiations are still scheduled for Friday.

Simultaneously, data from the American Petroleum Institute indicated a substantial draw of 11.1 million barrels from U.S. crude inventories last week.

If confirmed by official data released Wednesday, this would represent the largest weekly inventory decline since June.

Despite lingering signs of a potential supply surplus, anxieties over any conflict in the Middle East—the source of approximately one-third of the world's crude—drove prices higher last month.

Furthermore, oil has been influenced by broader turbulence in commodity markets, where gold and silver prices experienced a sharp sell-off before recouping some losses on Tuesday.

Another sign of escalating tensions emerged as a U.S.-flagged tanker was reportedly harassed by Iranian vessels in the Strait of Hormuz, a critical artery for global trade.

U.S. Central Command stated that Iran's Islamic Revolutionary Guard Corps "harassed" the *Stena Impero* tanker, which is part of a U.S. military fuel procurement program.

Market concerns are primarily focused on how any escalation in U.S.-Iran or Iran-Israel tensions could impact shipping traffic through the Strait of Hormuz.

This strategic waterway separates Iran from the Arabian Peninsula, with numerous tankers carrying crude oil and liquefied natural gas transiting daily to supply global markets.

On a separate front, according to Russian Deputy Prime Minister Alexander Novak, OPEC+ anticipates global oil demand will begin a gradual recovery starting in March or April, which should further balance market supply and demand.

The coalition is set to decide on March 1st whether to resume monthly production increases after pausing them in the first quarter.

Concurrently, U.S. energy stocks also moved higher. The S&P 500 energy sector closed up 3.24%, with Valero Energy (VLO) and Marathon Petroleum (MPC) rising 6%, Exxon Mobil (XOM) and Occidental Petroleum (OXY) gaining over 3%, and Chevron (CVX) and Devon Energy (DVN) advancing 2%.