Oil prices rose about 2% on Tuesday, reaching a two-week high, as persistent geopolitical tensions signaled that sanctions on Russia and Iran are unlikely to ease soon. Brent crude futures climbed $1, or 1.5%, to $65.63 a barrel by mid-morning, while U.S. West Texas Intermediate (WTI) gained $0.89, or 1.4%, to $63.41.
Analysts attributed the price strength to renewed risk premiums after deep Ukrainian strikes on Russian targets over the weekend. Russia, a key member of the OPEC+ alliance and the world’s second-largest oil producer in 2024, warned that efforts to resolve the Ukraine conflict remained “extraordinarily complex,” with little chance of an imminent breakthrough.
At the same time, negotiations between the U.S. and Iran over a nuclear deal appeared to be stalling. Iran is expected to reject the latest U.S. proposal, likely extending sanctions on the country’s oil exports. Iran ranked as OPEC’s third-largest crude producer in 2024, behind Saudi Arabia and Iraq.
Additional upward pressure came from ongoing wildfires in Alberta, Canada, which have disrupted more than 344,000 barrels per day of oil sands production—roughly 7% of Canada’s overall output. The supply concerns further bolstered prices already elevated by geopolitical instability.
Amid trade tensions, Trump is expected to speak with Chinese President Xi Jinping, just days after accusing Beijing of backtracking on earlier tariff agreements—adding another layer of uncertainty for markets already navigating tight oil supplies and geopolitical unrest.