Oil prices were largely unchanged on Tuesday as traders waited for fresh signals from geopolitical developments involving Iran and Russia, alongside upcoming data on the US economy and oil inventories.
Brent crude futures edged up by 27 cents, or 0.4%, to $69.31 a barrel, while US West Texas Intermediate (WTI) crude gained 12 cents, or 0.2%, to $64.48 during mid-morning trading.
Market attention remains firmly on tensions between Iran and the United States, according to Tamas Varga, oil analyst at brokerage PVM. He noted that without clear evidence of supply disruptions, oil prices could come under renewed downward pressure.
Iran’s foreign ministry said that recent nuclear talks with the US helped Tehran assess Washington’s intentions and showed sufficient alignment to continue diplomatic efforts. US and Iranian officials held indirect talks through Omani mediators in Oman last week, following heightened regional tensions after US President Donald Trump deployed a naval flotilla to the area.
Oil prices jumped more than 1% on Monday after the US Department of Transportation’s Maritime Administration advised US-flagged commercial vessels to keep their distance from Iranian waters and to verbally decline boarding requests from Iranian forces.
Roughly 20% of the world’s oil consumption flows through the Strait of Hormuz, the critical shipping route between Oman and Iran. Any escalation in the region could pose a serious threat to global oil supplies. Iran and fellow OPEC members Saudi Arabia, the United Arab Emirates, Kuwait and Iraq ship most of their crude through the strait, primarily to Asian markets.
IG analyst Tony Sycamore said that while talks in Oman struck a cautiously constructive tone, uncertainty around potential escalation, tighter sanctions or supply disruptions in the Strait of Hormuz has kept a modest risk premium in oil prices.
Iran ranked as OPEC’s third-largest crude producer in 2025, behind Saudi Arabia and Iraq, according to data from the U.S. Energy Information Administration.
Russia and Ukraine developments
European Union foreign policy chief Kaja Kallas said she would propose a list of concessions that Europe should seek from Russia as part of any potential peace settlement in Ukraine.
The EU is also considering extending sanctions to include ports in Georgia and Indonesia that handle Russian oil, marking the first time the bloc would target ports in third countries. The proposal aims to further restrict Russian revenue linked to the war.
Meanwhile, Indian Oil Corp purchased six million barrels of crude from West Africa and the Middle East, traders said, as India reduced its reliance on Russian oil while pursuing a trade agreement with Washington.
Russian Foreign Minister Sergei Lavrov said there was little reason for optimism over US pressure on Europe and Ukraine, noting that peace talks still face significant hurdles. Russia was the world’s third-largest crude producer in 2025, behind the US and Saudi Arabia, according to EIA data.
US economy and oil inventories
On the macroeconomic front, US retail sales unexpectedly remained flat in December, signaling slower momentum for consumer spending and economic growth at the start of the year.
Investors are closely watching key US data releases this week, including January’s nonfarm payrolls report and inflation figures, for clues on the future path of Federal Reserve interest rates. Central banks adjust rates to manage inflation, and Trump has repeatedly urged the Fed to cut rates to support growth and energy demand, despite the risk of higher inflation.
In the oil market, traders are awaiting weekly US inventory data from the American Petroleum Institute and the EIA. Analysts expect US crude stockpiles to have fallen by around 3.5 million barrels last week.
If confirmed, this would mark the first time since June 2025 that oil inventories have declined for three consecutive weeks. This compares with a build of 4.1 million barrels during the same period last year and a five-year average increase of 1.4 million barrels.
