Investing.com-- Oil prices dipped in Asian trading on Thursday after rallying sharply in the previous session as the U.S. authorised voluntary departures for military dependents in the Middle East amid rising tensions with Iran, stoking fears of supply disruptions.

Oil was also supported by the progress in U.S.-China trade talks, with investors closely watching details on the proposed framework deal.

As of 21:26 ET (01:26 GMT), Brent Oil Futures expiring in July slipped 0.4% to $69.47 per barrel, while West Texas Intermediate (WTI) crude futures also fell 0.4% to $67.95 per barrel.

Both contracts surged over 4% on Wednesday during a turbulent trading session, with price swings extending into early Asian hours.

Oil jumped as US-Iran tensions flare ahead of nuclear deadline

Wednesday’s spike reflects heightened geopolitical risk following Washington’s move to allow dependents to leave Bahrain and Kuwait amid fears of retaliation.

President Donald Trump said he was now “less confident” in striking a nuclear deal with Iran, further eroding hopes of a diplomatic resolution.

The White House has warned it would consider military measures should negotiations fail, with a key response deadline looming this Thursday.

Meanwhile, Iran’s defence minister threatened that Tehran would target U.S. bases regionally if attacked.

These developments added a geopolitical risk premium to crude, as investors feared any conflict could disrupt shipping routes or oil infrastructure across the Gulf.

Investors assess details on proposed US-China trade truce

President Trump told reporters on Wednesday that a trade framework with China is "done," subject to approval by him and President Xi Jinping.

The accord grants China export licenses for rare earth minerals and magnets, while the U.S. will allow continued access for Chinese students. Washington will maintain a total tariff rate of approximately 55% on Chinese imports, with China retaining a 10% tariff on American goods, Trump said in a social media post.

Trump added he will send letters in the coming weeks to key trading partners, outlining "take it or leave it" tariff offers ahead of a July 9 deadline tied to his pause on sweeping “liberation day” tariffs.

He said he is open to extending that deadline, but expects it won’t be necessary.

These developments reduced some uncertainty in global trade and improved the outlook for economic growth, which typically drives higher energy demand.