Meanwhile, Venezuela banks its first oil sale proceeds: File Image/Pixabay

Iran again continued to be the focus of oil trading on Wednesday, with upcoming negotiations between it and Washington, Iranian aggression against U.S. vessels, and U.S. president Donald Trump saying Iran's supreme leader "should be very worried" contributing  to a 3 percent rise for the commodity.

Brent settled up $2.13, or 3.1 percent, at $69.46 per barrel, and West Texas Intermediate settled up $1.93, or 3 percent, at $65.14 per barrel.

According to Axios, discussions between Washington and Iran's foreign minister set for Friday almost collapsed - and caused considerable tension in trading circles - when the two parties couldn't agree on a location; ultimately Muscat, Oman was decided upon.

Then, after the U.S. military shot down an Iranian drone that approached one of its aircraft carriers and Iranian gunboats tried to board a U.S. merchant vessel in the Strait of Hormuz, Trump told media of the Ayatollah Ali Khamenei, "I would say he should be very worried, yeah, he should be; as you know, they're negotiating with us."

Ajay Parmar, director of energy and refining at ICIS, said, "If a hot war is seen in Iran, this could put Iran's 3.4 million barrels per day [bpd] of supply at risk; but even more significant is Iran's control of the Strait of Hormuz, through which around 20 percent of global oil liquids pass."

Meanwhile, data released Wednesday by the Energy Information Administration showed that U.S. crude inventories fell last week by 3.5 million barrels as lower production and winter storms helped offset higher imports.

However, gasoline stocks gained 685,000 barrels at 257.9 million barrels, and gasoline demand fell by 604,000 bpd to 8.2 million bpd, while distillate fuel stocks fell by 5.6 million barrels to 127.4 million barrels.

Also on Wednesday, an unnamed U.S. government official told media that Venezuela has officially received all $500 million from the first Venezuelan oil sale, and that the money will be "disbursed for the benefit of the Venezuelan people at the discretion of the U.S. government."

The money was deposited in an account in Qatar, to be controlled by Washington.