Oil prices fell about 2% on Tuesday to their lowest levels in roughly two weeks as signs of progress in U.S.–Iran nuclear talks eased fears of an immediate supply disruption. Brent crude settled down $1.23, or 1.8%, at $67.42 a barrel, while U.S. West Texas Intermediate declined 56 cents, or 0.9%, to $62.33. It was Brent’s lowest close since early February and WTI’s weakest settlement in about two weeks.
Iran’s foreign minister said Tehran and Washington had reached an understanding on the main “guiding principles” during a second round of indirect talks in Geneva, though he cautioned that a final agreement was not imminent. The diplomatic tone reduced some of the geopolitical risk premium that has buoyed prices in recent weeks.
Markets remain highly sensitive to developments between the two countries. Iran briefly shut the Strait of Hormuz for several hours on Tuesday, according to state media, underscoring the fragility of the situation. Roughly 20% of global oil consumption moves through the strait between Oman and Iran, making it one of the world’s most critical energy chokepoints. Iran and fellow OPEC producers Saudi Arabia, the United Arab Emirates, Kuwait and Iraq export most of their crude via the route, largely to Asia.
Analysts said crude is likely to remain volatile, with prices driven more by diplomatic signals than by underlying supply-demand fundamentals. Any durable easing of tensions could weigh further on prices by reducing the risk of disruption to Iranian exports.
Additional pressure came from signs of rising supply. Kazakhstan’s giant Tengiz oil field is gradually restoring output following a January outage, according to Russian news agency Interfax. Meanwhile, U.S.-mediated talks between Russia and Ukraine continued in Geneva. A potential peace resolution could eventually lead to an easing of sanctions on Moscow and greater Russian oil flows back into mainstream markets. Russia was the world’s third-largest crude producer in 2025, behind the United States and Saudi Arabia, according to U.S. government data.
Despite Tuesday’s decline, traders cautioned that the market remains headline-driven, with sharp swings likely as negotiations unfold on multiple geopolitical fronts.