Oil Prices Steady as U.S.–Iran Nuclear Talks Take Center Stage
Oil prices traded within a narrow range on Tuesday, as investors closely monitored nuclear negotiations between the United States and Iran. Trading volumes remained light due to holidays in the U.S. and several Asian markets.
At 08:10 ET (13:10 GMT), Brent crude futures for April delivery edged up 0.1% to $68.71 per barrel. Meanwhile, West Texas Intermediate (WTI) crude climbed 1.4% to $63.65 per barrel.
The stronger move in WTI was influenced by the U.S. market holiday on Monday. In addition, several Asian countries, including China, remain closed for holidays, contributing to thinner trading conditions.
U.S.–Iran Nuclear Negotiations in Focus
Senior officials from the United States and Iran are meeting in Geneva, Switzerland, to discuss Iran’s nuclear enrichment program.
Washington maintains that Iran could seek to develop nuclear weapons, which would significantly increase instability in the Middle East and pose a threat to Israel. Iran continues to insist that its nuclear program is intended solely for peaceful energy purposes. However, the country has enriched uranium to levels far beyond those required for civilian power generation, approaching weapons-grade purity.
U.S. President Donald Trump stated that he would be “indirectly involved” in the discussions, although further details were not provided.
The Geneva talks follow earlier discussions this month between Tehran and Washington that failed to produce meaningful progress.
Recent reports indicate that the U.S. deployed a second aircraft carrier to the Middle East ahead of the negotiations. There were also suggestions that Washington is preparing contingency plans for an extended military operation if diplomacy breaks down.
As a result, oil markets have priced in a higher geopolitical risk premium, given the possibility of supply disruptions in the Middle East.
Stronger Dollar Pressures Crude Prices
The strength of the U.S. dollar has also weighed on oil prices this week. The greenback advanced in thin trading conditions as investors positioned ahead of several key U.S. economic reports.
Market attention is focused on upcoming data releases, including industrial production figures, trade data, and most notably the Personal Consumption Expenditures (PCE) price index. The PCE index is the Federal Reserve’s preferred measure of inflation and plays a key role in shaping interest rate expectations.
In addition, the minutes from the Federal Reserve’s January policy meeting are due this week and could provide further guidance on the outlook for monetary policy.
Saudi Crude Exports to China Expected to Increase
Analysts at ING suggest that Saudi Arabia’s crude exports to China may rise in the coming month. The increase follows a price cut to Saudi Aramco’s flagship crude grade, now at its lowest level in more than five years for Asian buyers.
According to ING, Saudi Aramco could ship between 56 and 57 million barrels of crude next month, up from approximately 48 million barrels previously.
An increase in Saudi exports to China may influence regional supply dynamics and impact global oil price trends in the weeks ahead.
