Oil prices rose during Asian trading on Tuesday, holding just below a seven-month high reached in the previous session. Gains were supported by geopolitical risk premiums as investors awaited the upcoming round of nuclear negotiations between Washington and Tehran, while broader uncertainty surrounding U.S. trade tariffs kept market sentiment cautious.
As of 03:22 GMT (10:22 a.m. Vietnam time), Brent crude futures climbed 0.8% to $72.04 per barrel, while West Texas Intermediate (WTI) crude futures also rose 0.8% to $66.81 per barrel. Both contracts had approached seven-month highs in the prior session but closed slightly lower as traders refrained from aggressive positioning ahead of key diplomatic developments.
Investor attention is now firmly centered on the third round of nuclear negotiations between Washington and Tehran, scheduled to take place Thursday in Geneva.
Tensions between the two sides have escalated in recent days amid signs of potential confrontation. The United States withdrew some non-essential embassy personnel from Beirut, a move widely interpreted as preparation for possible instability should diplomatic efforts collapse.
Meanwhile, Donald Trump warned in a social media post that it would be a “very bad day” for Iran if no agreement is reached, reinforcing market sensitivity to the outcome of the talks.
According to analysts at ING, current oil prices reflect a notable geopolitical risk premium. Should negotiations succeed, a significant portion of that premium could erode, leading to price corrections. However, achieving a comprehensive agreement remains far from certain.
Conversely, a breakdown in talks could heighten concerns over stricter sanctions on Iranian oil exports or potential disruptions near the Strait of Hormuz — a strategic chokepoint that handles roughly one-fifth of global crude oil shipments.
Fears of a potential military confrontation helped push oil prices up approximately 6% last week, marking one of the strongest weekly gains in recent months.
Beyond geopolitics, oil markets are also navigating broader macroeconomic uncertainty tied to U.S. trade policy.
Recently, the Supreme Court of the United States rejected a prior round of tariffs that had been imposed under emergency powers. However, the administration quickly moved to reintroduce tariffs of up to 15% under alternative legal frameworks.
President Trump further warned that countries “gaming” U.S. trade agreements could face even higher duties, raising the specter of renewed trade friction.
Prolonged trade tensions could weigh on global economic growth — a key determinant of oil consumption.
Weaker trade flows often translate into slower industrial production and reduced transportation activity, ultimately dampening fuel demand. This demand-side risk has tempered oil’s upside momentum, even as geopolitical factors provide underlying support.
In the near term, oil markets are caught between two opposing forces:
Bullish drivers:
Elevated geopolitical risk
Potential supply disruptions in the Middle East
Existing risk premium embedded in prices
Bearish pressures:
Trade policy uncertainty
Slower global growth prospects
Concerns about weakening fuel demand
If U.S.–Iran negotiations yield positive progress, the possibility of increased Iranian oil supply could exert downward pressure on prices. On the other hand, any escalation in tensions could quickly propel Brent above the $75 per barrel mark.
From a technical standpoint, Brent’s recent seven-month high represents a key resistance zone. A decisive breakout could open the door to further gains, while near-term support lies around the $70 per barrel level.
Although oil prices remain elevated, investor sentiment is cautious rather than outright bullish. Hedge funds reportedly increased net long positions last week, but positioning has not reached extreme levels.
This suggests that markets are not fully pricing in a worst-case conflict scenario but are instead waiting for clearer signals from diplomatic channels.
In the coming days, oil markets will be highly sensitive to:
The outcome of U.S.–Iran negotiations in Geneva.
New policy statements from the White House regarding tariffs.
Developments around the Strait of Hormuz and broader Middle East stability.
Economic data signaling trends in global fuel demand.
The interplay between geopolitical risk and trade uncertainty could amplify volatility in the short term.
Oil prices today remain perched near a seven-month high, supported by geopolitical tensions surrounding U.S.–Iran negotiations. At the same time, uncertainty over U.S. trade tariffs continues to cloud the global demand outlook.
The next directional move for Brent and WTI will likely hinge on diplomatic developments this week. An escalation in tensions could extend the rally, while signs of de-escalation may swiftly erode the current risk premium.
For now, the energy market stands at a pivotal juncture — one that could shape global oil trends in the weeks ahead.
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