Oil prices surge on collapse of U.S.-Iran talks

Investing.com -- Oil prices jumped nearly 3.5% on Wednesday after reports emerged that planned talks between the United States and Iran might collapse.

U.S. crude oil rose $2.12, or roughly 3.5%, to above $65.30 a barrel as of 1:35 p.m. ET. Global benchmark Brent increased $2.28, or 3.4%, to $69.6 a barrel.

The price surge followed an Axios report indicating disagreement between Iran and the U.S. over the location for talks scheduled for Friday.

According to the report, both countries had initially agreed to meet in Istanbul with other Middle East countries as observers. However, Tehran later sought to change the format to a bilateral meeting in Oman. The U.S. officials considered the proposed change, but reportedly ultimately rejected it. The Iranian side was also unwilling to revert to the original Istanbul format, the report said.

Axios added that discussions could still take place this week or next if Tehran agrees to return to the original meeting plan.

This diplomatic impasse comes amid rising tensions, as the U.S. military reported Tuesday it had shot down an Iranian drone that approached the USS Abraham Lincoln aircraft carrier. President Trump has threatened military strikes against Iran if it fails to agree to terms governing its nuclear program.

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