Oil prices were largely unchanged on Tuesday after rising more than 2% in the previous session, as investors weighed escalating geopolitical tensions against ongoing concerns about global oversupply. The earlier gains followed accusations from Moscow that Ukraine had targeted the residence of Vladimir Putin, heightening fears of potential supply disruptions and pushing traders to seek clearer signals from Ukraine peace talks.
Brent crude futures for February delivery, which expire later on Tuesday, slipped by 2 cents to $61.92 a barrel in early Asian trading. The more actively traded March Brent contract edged down 5 cents to $61.44. Meanwhile, U.S. West Texas Intermediate crude eased 5 cents to $58.03 a barrel.
Both Brent and WTI benchmarks had settled more than 2% higher in the prior session after Russia’s accusation against Kyiv fueled worries about supply risks. Ukraine rejected the claims, calling them unfounded and aimed at derailing peace negotiations. Following a phone call with Putin, U.S. President Donald Trump said he was angered by the details surrounding the alleged attack.
Rising geopolitical uncertainty has kept markets on edge, even as Trump reiterated his view that a peace agreement could still be within reach. Analysts note, however, that the growing complexity of negotiations may limit optimism. According to Marex analyst Ed Meir, markets are increasingly sensing that a deal will be difficult to achieve.
Additional pressure came from developments in the Middle East. Trump warned that the United States could back another major strike on Iran if Tehran resumes rebuilding its ballistic missile or nuclear programs. He also cautioned Palestinian militant group Hamas of serious consequences if it failed to disarm, while expressing support for advancing to the next phase of the Israel-Hamas ceasefire reached in October.
Despite heightened geopolitical risks and fears of supply disruptions, analysts say perceptions of an oversupplied oil market continue to cap price gains. Meir noted that crude prices could trend lower in the first quarter of 2026 due to what he described as a “growing oil glut.”
Analysts at IG echoed this cautious outlook, stating that competing forces—U.S.-led peace efforts, persistent oversupply, and simmering geopolitical tensions—are likely to keep WTI trading in a $55 to $60 range in the near term.
