Oil prices ease on geopolitical uncertainty
NEW YORK: Oil prices fell on Tuesday due to uncertainty in US-Iran negotiations and Russia-Ukraine peace talks, while new government data delivered a cautious outlook for top crude-importer China's economy.
Brent futures were down 42 cents, or 0.6%, to $65.12 a barrel at 11:02 a.m. EDT (1502 GMT), while US West Texas Intermediate (WTI) crude slid 26 cents, or 0.4%, to $62.43.
Iran's Supreme Leader Ayatollah Ali Khamenei said US demands that Tehran stop enriching uranium are 'excessive and outrageous,' voicing doubts whether talks on a new nuclear deal will succeed. Iran was the third-biggest crude producer in the Organization of the Petroleum Exporting Countries (OPEC) group in 2024 behind Saudi Arabia and Iraq, according to US federal energy data.
A deal between Iran and the US would allow Iran to raise oil exports by 300,000 to 400,000 barrels per day if sanctions were eased, StoneX analyst Alex Hodes said.
The European Union and Britain announced new sanctions against Russia without waiting for the US to join them, a day after US President Donald Trump spoke to Russian President Vladimir Putin without winning a promise for a ceasefire in Ukraine. Ukraine wants the Group of Seven (G7) advanced economies to reduce their price cap on Russian seaborne oil to $30 per barrel. The current G7 cap, imposed over Russia's war in Ukraine, is $60.
'An immediate resolution of the Russia/Ukraine war does, however, look unlikely. So while it could lead to more oil from Russia into the market, it is out in time and uncertain as Russia is still bound by its obligation to OPEC+,' said Bjarne Schieldrop, chief commodities analyst at SEB, a Nordic bank. An agreement to end the war between Russia and Ukraine could allow Moscow to export more oil to the world.
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