Oil prices jump on report U.S.-Iran nuclear talks are collapsing

Oil prices rose Wednesday after President Donald Trump said Iran’s Supreme Leader Ayatollah Ali Khamenei “should be very worried.”

U.S. crude oil rose $1.82, or 2.88%, to $65.08 a barrel by 2:58 p.m. ET. Global benchmark Brent was up $2.04, or 3.03%, to $69.37 a barrel.

Trump issued his warning to Khamenei in an interview with NBC News. Two U.S. officials told Axios earlier Wednesday that plans for nuclear talks between the U.S. and Iran are on the verge of collapsing.

Trump has threatened to launch military strikes on Iran if it doesn’t agree to a deal governing its nuclear program. Discussions between U.S. and Iranian officials scheduled for Friday had raised hopes that the adversaries were on a path to de-escalation.

But it’s now unclear whether those talks will take place. The U.S. and Iran disagree on the location and format of the discussions, the U.S. officials told Axios.

The U.S. and Iran had agreed to meet in Istanbul with other Middle East countries participating as observers. But Tehran wanted to change the format to a bilateral meeting in Oman, the officials said.

The U.S. considered the change but ultimately rejected it, the officials said. The Iranians were not willing to return to the original format, they said.

The officials told Axios that talks could still take place this week or next, if Tehran agrees to the original plan for the meeting.

The reported breakdown in talks comes after the U.S. military said Tuesday it shot down an Iranian drone that approached the USS Abraham Lincoln aircraft carrier. Iranian gunboats also tried to board a U.S. merchant vessel in the Strait of Hormuz, according to U.S. Central Command.

Iranian media said the drone was conducting routine surevillance that is permitted under international law.