Oil prices climbed on Tuesday, approaching seven-month highs, as traders evaluated potential supply risks linked to rising tensions between the United States and Iran ahead of another round of nuclear negotiations.
Brent crude futures gained 48 cents, or 0.7%, to $71.97 per barrel by 06:58 GMT. U.S. West Texas Intermediate (WTI) crude rose 45 cents, also 0.7%, to $66.76 per barrel. Brent was trading at its strongest level since July 31, while WTI reached its highest point since August 1.
Geopolitical Tensions Drive Oil Prices Higher
Market analysts noted that geopolitical developments are currently the main force supporting oil prices. According to Priyanka Sachdeva, senior market analyst at Phillip Nova, the recent strength in crude prices is largely driven by expectations rather than confirmed supply disruptions.
Concerns are growing that any escalation in the Middle East could threaten oil flows, prompting traders to hedge against worst-case scenarios.
The United States and Iran are set to hold a third round of nuclear talks in Geneva on Thursday, Oman’s Foreign Minister Badr Albusaidi confirmed. Washington is seeking limits on Iran’s nuclear programme, while Tehran continues to reject accusations that it aims to develop nuclear weapons.
Heightening tensions, the U.S. State Department has begun evacuating non-essential personnel and their families from its embassy in Beirut, citing increasing concerns over a potential military confrontation involving Iran.
U.S. President Donald Trump warned in a social media post that it would be a “very bad day” for Iran if no agreement is reached.
Kelvin Wong, senior market analyst at OANDA, said geopolitical risks related to U.S.-Iran tensions are likely to remain the primary short-term driver for oil markets. Technically, WTI crude is maintaining a bullish short-term trend, holding above its 20-day moving average, with $63.90 per barrel acting as key support.
Trade Policy Adds to Market Uncertainty
In addition to geopolitical concerns, U.S. trade policy is contributing to uncertainty around global growth and fuel demand.
President Trump recently warned countries not to withdraw from recently negotiated trade agreements after the Supreme Court invalidated his emergency tariffs. He indicated that higher duties could be imposed under alternative legal frameworks.
Over the weekend, President Trump announced plans to raise a temporary tariff on U.S. imports from 10% to 15%, the maximum level permitted under current law.
Analysts at UOB Bank noted that the renewed tariff measures have increased uncertainty surrounding global economic growth, which could ultimately affect oil demand.
