US-Iran negotiations imminent, oil prices stay near 7-month highs, tariff outlook clouded

Investing.com - On Tuesday during Asian trading hours, oil prices rose, remaining near the highest levels in nearly 7 months reached in the previous trading day, as investors await the US-Iran talks later this week. Uncertainty over trade tariffs kept market sentiment cautious.

As of 22:22 Eastern Time (03:22 Beijing Time), Brent crude futures increased by 0.8% to $72.04 per barrel, while West Texas Intermediate (WTI) futures also rose by 0.8% to $66.81 per barrel.

Both contracts reached nearly 7-month highs in the previous trading day but closed slightly lower.

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Traders await US-Iran talks later this week

Ahead of the third round of nuclear negotiations between Washington and Tehran scheduled for Thursday in Geneva, the market remains tense.

Since last week, tensions have continued to escalate, with signs of potential escalation. The US has withdrawn some non-essential embassy personnel from Beirut, highlighting concerns about diplomatic failure and potential conflict.

On Monday, President Trump posted on social media that if Iran does not reach an agreement, it will be “a very bad day” for Iran.

ING analysts stated in a recent report: “If an agreement is reached, we will see the risk premium currently priced into the market retreat quite aggressively — although, of course, reaching an agreement is easier said than done.”

Any breakdown in negotiations could trigger concerns over stricter sanctions enforcement or disruptions around the Strait of Hormuz, a vital route for global oil flows.

Fears of potential military confrontation helped push oil prices up 6% last week.

Tensions over Trump tariffs cast a shadow over demand outlook

After the US Supreme Court rejected a batch of tariffs previously imposed under emergency powers, the oil market is also dealing with broader macroeconomic uncertainties.

Trump subsequently reimposed tariffs of up to 15% under alternative regulations and warned that countries “playing games” with US trade agreements could face higher tariffs.

The prospect of renewed trade tensions has cast a shadow over global growth and fuel demand outlooks. Even as geopolitical risks continue to support oil prices, they have also restrained their upward momentum.

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