Crude oil futures rose more than 4% on June 11, 2025 to $68 a barrel, the largest gain since October, as tensions escalated between the United States and Iran. President Donald Trump expressed doubt that the two countries will reach a nuclear deal. The UK Navy also issued a rare warning to mariners that higher tensions in the Middle East could affect shipping.
In a separate development, U.S. crude inventories fell by 3.6 million barrels to 432.4 million barrels last week, according to the Energy Information Administration (EIA). That drop exceeded analysts’ expectations of a 2-million-barrel draw, offering further support to oil prices.
United States Oil Fund LP USO and United States Brent Oil Fund LP BNO each advanced more than 4% on Jun 11, 2025.
U.S. Moves Personnel Ahead of Iran Talks
President Donald Trump announced the relocation of non-essential U.S. personnel from the Middle East, citing increasing regional danger. Trump reportedly has less confidence that the United States and Iran can strike a deal over the Islamic Republic’s nuclear program that would avoid a war in the region.
The United States plans a partial evacuation of its embassy in Iraq, according to sources cited by Reuters, as quoted on Yahoo Finance. Trump reaffirmed the U.S. stance that Iran must not develop nuclear weapons. Iran maintains its nuclear program is for peaceful purposes.
Market Awaits Outcome of U.S.-Iran Meeting
High-stakes talks between the United States and Iran are scheduled for Sunday in Oman, where U.S. Special Envoy Steve Witkoff will meet Iranian Foreign Minister Abbas Araghchi. However, optimism is fading.
Tensions Heighten as Both Sides Issue Warnings
Iranian Defense Minister Aziz Nasirzadeh warned that Iran would retaliate by targeting U.S. bases in the region if conflict breaks out. Meanwhile, President Trump reiterated that military action remains an option if diplomacy fails.
Analysts See Price Correction After Overreaction: Diplomacy in the Cards?
Vivek Dhar, Director of Mining and Energy Commodities Research at Commonwealth Bank of Australia, noted that oil's rally may have been "overdone," as the United States had not identified a specific Iranian threat.
However, while he added that while a short-term pullback is reasonable, geopolitical risks are likely to keep Brent prices above $65 per barrel until there's greater clarity on the negotiations. Some traders are now betting on a likely de-escalation following Sunday’s talks.
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United States Oil ETF (USO): ETF Research Reports United States Brent Oil ETF (BNO): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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