Oil prices advanced on Tuesday, approaching their highest levels in nearly seven months as markets weighed potential supply risks linked to escalating geopolitical tensions ahead of another round of nuclear negotiations between the United States and Iran.
Brent crude futures gained 48 cents, or 0.7%, to $71.97 per barrel by 0658 GMT, while U.S. West Texas Intermediate crude rose 45 cents, also 0.7%, to $66.76 per barrel.
Brent is currently trading at its strongest level since July 31, while WTI stands at its highest point since August 1.
“At this stage, geopolitics is clearly doing most of the heavy lifting for oil prices, with the current firmness largely driven by anticipation rather than actual supply loss,” said Phillip Nova senior market analyst Priyanka Sachdeva.
“The risk of possible military escalation in the Middle East is gaining traction, and thus, traders appear to hedge against worst-case scenarios.”
A third round of nuclear negotiations between Iran and the United States is scheduled for Thursday in Geneva, Oman’s Foreign Minister Badr Albusaidi confirmed on Sunday.
Washington is pushing Tehran to abandon its nuclear programme, while Iran has firmly rejected the demand and continues to deny pursuing nuclear weapons capabilities.
Amid mounting concerns about a potential military confrontation, the U.S. State Department has begun withdrawing non-essential personnel and family members from its embassy in Beirut, according to a senior official on Monday.
U.S. President Donald Trump warned in a social media post on Monday that it would be a “very bad day” for Iran if an agreement is not reached.
“In the near-term, geopolitical factors related to the U.S.-Iran conflict are likely to be the primary driver for oil prices,” said OANDA senior market analyst Kelvin Wong.
“For now, WTI crude oil is evolving in a short-term bullish dynamic, holding above its 20-day moving average, acting as a key short-term support at $63.90/barrel.”
Trade policy developments also remained in focus. Trump cautioned countries on Monday against withdrawing from recently negotiated trade agreements with the United States after the Supreme Court struck down his emergency tariffs, warning that higher duties could be imposed under alternative trade laws.
“U.S. President Donald Trump created uncertainty for global growth and fuel demand with a new round of tariff hikes,” UOB Bank analysts said in a client note.
Trump stated on Saturday that a temporary tariff on U.S. imports from all countries would be raised to 15% from 10%, the highest level permitted under current legislation.