Oil prices were largely unchanged on Tuesday as markets reassessed weakening prospects for a Russia-Ukraine peace agreement alongside rising geopolitical tensions in the Middle East, particularly around Yemen.
Brent crude futures for February delivery edged higher by 27 cents, or 0.4%, reaching $62.21 per barrel in afternoon trading. Meanwhile, U.S. West Texas Intermediate crude rose 36 cents, or 0.6%, to $58.44 a barrel.
Both global oil benchmarks had gained more than 2% in the previous session following fresh geopolitical developments. These included Saudi Arabia launching airstrikes in Yemen and Russia accusing Ukraine of targeting a Russian presidential residence, events that significantly reduced expectations of near-term peace talks.
Russia said it would harden its stance in negotiations after making the allegation, which Ukraine firmly denied, calling the claim unfounded and aimed at undermining diplomatic efforts.
According to Giovanni Staunovo, an analyst at UBS, oil markets have adjusted to the reality that a breakthrough in peace negotiations between Russia and Ukraine is unlikely in the short term.
Additional support for prices came from ongoing supply disruptions, including continued U.S. restrictions on Venezuelan oil exports and the suspension of Caspian CPC Blend shipments due to adverse weather conditions.
Supply concerns were further amplified by renewed military activity in Yemen. A Saudi Arabia-led coalition carried out strikes on what it described as foreign-backed military targets linked to UAE-supported southern separatist forces.
Saudi Arabia stated that national security remained a red line and called for United Arab Emirates forces to withdraw from Yemen within 24 hours. This came shortly after an airstrike targeted the southern port city of Mukalla.
The UAE responded by expressing disappointment with Saudi Arabia’s remarks and surprise over the strikes. Later, the UAE’s Defence Ministry confirmed it had voluntarily ended the mission of its counterterrorism units in Yemen, marking the final withdrawal of its remaining forces following the end of its broader military involvement in 2019.
Markets were also monitoring broader Middle East risks after U.S. President Donald Trump said the United States could support another major strike on Iran if Tehran resumed efforts to rebuild its ballistic missile or nuclear weapons programs.
Despite the renewed geopolitical risks and supply concerns, analysts caution that perceptions of an oversupplied global oil market persist and may limit further price gains.
According to Ed Meir, an analyst at Marex, oil prices are likely to face downward pressure in the first quarter of 2026 due to what he described as a growing global oil glut.
