Oil prices pulled back from near seven-month highs on Tuesday, as signs of progress in U.S.–Iran nuclear diplomacy eased some of the geopolitical risk premium that had been driving crude prices higher. Brent crude futures fell 72 cents, or 1%, to $70.77 a barrel, while U.S. West Texas Intermediate slid 68 cents, or 1%, to $65.63.
The retreat came ahead of a third round of indirect nuclear talks scheduled for Thursday in Geneva between U.S. and Iranian delegations, with Iran’s deputy foreign minister saying Tehran was prepared to take necessary steps to reach a deal. While this does not guarantee a comprehensive agreement, it tempered immediate fears of a conflict that might disrupt supply from the Middle East.
Oil markets remain sensitive to the U.S.–Iran dynamic, as heightened tensions have lifted crude toward multi-month highs in recent sessions. Traders are watching closely for diplomatic signals that could either calm or exacerbate geopolitical risk around the Strait of Hormuz, through which a significant share of global crude exports transit.
Several broader market themes also influenced sentiment on Tuesday. U.S. trade policy uncertainty — including the implementation of new global import tariffs — added an element of macroeconomic risk that has weighed on demand expectations. In addition, steps to boost Venezuelan crude exports under a supply deal are expected to increase flows from South America, while U.S. forces seized another sanctioned oil tanker carrying Venezuelan cargo, highlighting enforcement of energy sanctions and floating storage shifts.
On the inventory front, analysts were awaiting weekly crude stockpile data from U.S. reporting agencies, with forecasts pointing to a modest build that would add to existing ample supplies.