Oil prices fall on Tuesday after posting strong gains in the previous session, as investors closely monitored developments in the ongoing US-Iran talks. Market sentiment remained cautious despite comments from US President Donald Trump, who said negotiations with Iran were still underway.
At 0434 GMT, Brent crude futures fell 75 cents, or 0.79%, to $94.23 per barrel. Meanwhile, West Texas Intermediate (WTI) crude dropped 85 cents, or 0.92%, to $91.31 per barrel. Both benchmarks had surged more than 5% on Monday after hopes emerged that a diplomatic breakthrough could ease tensions in the Middle East.
Market Focuses on US-Iran Negotiations
Although Trump stated that discussions with Tehran were continuing, reports from Iran painted a different picture. Iran’s Tasnim News Agency claimed that Tehran had suspended indirect negotiations with Washington. Consequently, uncertainty surrounding the US-Iran peace talks continued to influence oil markets.
Market analysts said traders remain focused on any signs of progress or setbacks in the negotiations. Furthermore, concerns over the security of the Strait of Hormuz, a critical global energy route, continue to support elevated oil prices.
Analysts noted that the outcome of the negotiations will likely determine whether the current risk premium remains embedded in the market or gradually fades.
Middle East Tensions Keep Energy Markets Volatile
Meanwhile, Lebanon announced a partial ceasefire between Hezbollah and Israel, offering limited hope for regional de-escalation. However, ongoing disruptions to shipping routes have maintained pressure on global energy supplies.
In addition, US crude exports reached a record 5.6 million barrels per day in May as refiners in Asia and Europe increased purchases amid supply concerns. Expectations of falling US crude stockpiles have also provided support to oil prices.
As a result, analysts expect oil market volatility to continue until clearer signs of diplomatic progress emerge.
