Oil prices edged higher on Tuesday after posting losses of more than 4% in the previous session, as investors assessed the global supply outlook and weighed signs of easing tensions between the United States and Iran.
Brent crude futures rose 45 cents, or 0.68%, to $66.75 per barrel by 14:13 GMT. U.S. West Texas Intermediate (WTI) crude climbed 56 cents, or 0.9%, to $62.70 per barrel.
Earlier in the session, both benchmarks touched their lowest levels in a week, with Brent falling to $65.19 per barrel and WTI sliding to $61.12 per barrel.
Supply concerns and diplomacy pressure prices
According to analysts at Commerzbank, oil prices have been under pressure due to several supply-related developments. These include the prospect of renewed U.S.–Iran talks, the gradual recovery of output at Kazakhstan’s Tengiz oil field, and U.S. production restarting after recent winter storms.
Oil prices tumbled more than 4% on Monday after Donald Trump said Iran was “seriously talking” with Washington, signaling a potential de-escalation in geopolitical tensions.
Iran and the United States are expected to resume nuclear negotiations on Friday in Turkey, according to officials cited by Reuters. Trump also warned that failure to reach an agreement could have serious consequences, noting the presence of U.S. warships in the region.
Geopolitical risk fuels volatility
Kelvin Wong, senior market analyst at OANDA, said oil markets have been highly volatile over the past four weeks due to geopolitical risks linked to the U.S. administration’s expansionary foreign policy, particularly the intermittent threats toward Iran.
On the supply side, production at Kazakhstan’s massive Tengiz oil field has continued to recover. Output reached nearly 20% of capacity on Sunday after a complete outage in mid-January, according to industry sources.
Meanwhile, U.S. oil producers continued restoring operations, with only about 0.7% of national crude output still offline following last month’s winter storm disruptions.
OPEC+ holds output steady
Russia’s Deputy Prime Minister Alexander Novak said on Tuesday that the global oil market is currently balanced, adding that demand is expected to gradually increase in March and April.
His comments followed a decision by OPEC+ to keep oil production levels unchanged for March, after a meeting held on Sunday.
Separately, Trump announced a trade agreement with India that reduces U.S. tariffs on Indian goods to 18% from 50%, in exchange for India lowering trade barriers and halting purchases of Russian oil.
ING analysts noted that if India reduces its imports, more Russian oil could remain unsold or be redirected, increasing the volume of crude floating at sea.
