WTI crude oil futures traded around $63.70 per barrel on Tuesday, stabilizing after a 1.4% gain in the previous session driven by heightened geopolitical tensions between the US and Iran ahead of a second round of talks. On Monday, Iran began a maritime drill in the Strait of Hormuz, a key oil transit chokepoint, following the deployment of a second US aircraft carrier to the region. These developments come as the two countries prepare to resume nuclear negotiations later today.
Iran’s atomic chief signaled that Tehran may be willing to dilute its most highly enriched uranium in exchange for a full lifting of financial sanctions. Separately, US-led talks between Russia and Ukraine are also scheduled to start later today, although markets remain doubtful that any swift diplomatic breakthrough will be achieved.
On the supply side, some of the upside price risk is being tempered by reports that OPEC+ is considering resuming production increases in April, potentially adding barrels to a market already contending with a growing supply glut.
