Investing.com-- Oil prices extended gains in Asian trading on Wednesday as the U.S. imposed fresh sanctions on Iran amid ongoing nuclear talks, while investors assessed a weekly report showing a large decline in U.S. crude stockpiles.

Market sentiment was further bolstered by U.S. President Donald Trump stepping back from earlier threats to dismiss Federal Reserve Chair Jerome Powell and expressing confidence in the country’s trade relations

As of 21:07 ET (01:07 GMT), Brent Oil Futures expiring in June rose 1% to $68.12 per barrel, while West Texas Intermediate (WTI) crude futures also advanced 1% to $63.58 per barrel.

Both contracts settled nearly 2% higher on Tuesday.

US sanctions Iran’s LPG magnate amid nuclear talks

The U.S. Department of the Treasury on Tuesday imposed new sanctions targeting Seyed Asadoollah Emamjomeh, a prominent Iranian businessman in the liquefied petroleum gas (LPG) sector, along with his associated corporate network.

This action is part of Washington’s broader strategy to curtail Iran’s energy revenues, which are believed to fund destabilizing activities in the Middle East.

“Emamjomeh and his network sought to export thousands of shipments of LPG—including from the United States—to evade U.S. sanctions and generate revenue for Iran,” said Secretary of the Treasury Scott Bessent in a statement.

Both parties have agreed to commence expert-level discussions to design a framework for a potential nuclear deal, with the next meeting scheduled on Saturday in Oman.

Trump backs off Powell threat, signals trade optimism

President Donald Trump on Tuesday eased tensions with the Federal Reserve, backing off from earlier threats to dismiss Chair Jerome Powell.

The move comes after days of heightened criticism from the president, who has repeatedly urged the central bank to cut interest rates more aggressively.

Trump also expressed optimism over potential trade negotiations with China. He said a potential deal could lead to a “substantial” reduction in tariffs. But "it won’t be zero," he added.

Trump asserted that the U.S. is "doing fine with China" and other countries.

US crude stockpiles jumped last week- API

The American Petroleum Institute (API) on Tuesday reported a significant drawdown in U.S. crude oil inventories, with a decrease of 4.565 million barrels for the week ending April 18.

This contrasts sharply with the previous week’s unexpected build of 2.4 million barrels, indicating a notable shift in supply-demand dynamics.

The substantial draw suggests a tightening in the oil market, potentially due to increased refinery activity or higher export levels.

Market participants awaited the official data from the U.S. Energy Information Administration (EIA), scheduled for release later in the day, to confirm these trends.