Oil markets rally as US refusal to alter Iran talks stokes tensions

Oil prices climbed about three per cent on Wednesday on a report that the US would not agree to change the location and format of talks with Iran planned for Friday.

Brent futures rose $2.06, or 3.06 per cent, to $69.39 a barrel at 13:09 EST (18:09 GMT), while US West Texas Intermediate crude rose $1.93, or 3.05 per cent, to $65.14.

The US has decided to reject Iran's request to change the location of talks planned for Friday, Axios reported on Wednesday, citing two US officials. Tehran is, "fully ready to hold talks with US only on nuclear issue," a senior Iranian official told Reuters on Wednesday.

Both crude benchmarks have seesawed this week between news of talks to de-escalate tensions between the US 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.