BY COMFORT OGBONNA
Oil prices advanced on Tuesday, hovering near seven-month highs, as traders weighed the potential impact of escalating geopolitical tensions ahead of another round of nuclear talks between the United States and Iran.
Brent crude futures rose 48 cents, or 0.7%, to $71.97 a barrel by 0658 GMT, marking their strongest level since July 31. Meanwhile, U.S. West Texas Intermediate (WTI) crude futures gained 45 cents, also up 0.7%, to $66.76 a barrel — the highest since August 1. The steady climb reflects growing unease over possible supply disruptions in the Middle East, even though no actual losses have materialized so far.
Market analysts say the current rally is being driven largely by geopolitical risk premiums rather than changes in underlying supply-demand fundamentals. Priyanka Sachdeva, senior market analyst at Phillip Nova, noted that oil’s recent firmness is based more on anticipation than concrete supply shortages. She added that concerns over potential military escalation in the Middle East are prompting traders to hedge against worst-case scenarios.
Attention is now focused on an upcoming third round of nuclear negotiations between Washington and Tehran, scheduled to take place Thursday in Geneva. The talks were confirmed by Oman’s foreign minister, Badr Albusaidi, who has played a mediating role in facilitating dialogue between the two sides.
The United States is pushing for Iran to abandon its nuclear program, while Iran has consistently denied seeking to develop atomic weapons and has refused to dismantle its nuclear activities. The diplomatic standoff has kept energy markets on edge, given Iran’s significant role as an oil producer within the region.
Adding to concerns, the U.S. State Department announced it is withdrawing non-essential personnel and their families from the American embassy in Beirut. The move, described by a senior official on Monday, underscores rising fears of a broader regional conflict that could disrupt oil flows.
U.S. President Donald Trump intensified rhetoric in a social media post, warning that it would be a “very bad day” for Iran if no agreement is reached. His comments reinforced investor anxiety and contributed to upward pressure on crude prices.
Kelvin Wong, senior market analyst at OANDA, said geopolitical factors linked to the U.S.-Iran dispute are likely to remain the primary short-term driver of oil prices. He added that WTI crude is currently maintaining a bullish pattern, trading above its 20-day moving average, which serves as a key technical support level around $63.90 per barrel.
Beyond geopolitical tensions, markets are also grappling with renewed uncertainty on trade policy. Trump warned countries against retreating from recently negotiated trade agreements after the U.S. Supreme Court invalidated his earlier emergency tariffs. He signaled that nations attempting to sidestep agreements could face significantly higher duties under alternative legal frameworks.
Analysts at UOB Bank said in a client note that the latest tariff threats could cloud the outlook for global economic growth and, by extension, fuel demand. Over the weekend, Trump announced plans to raise a temporary tariff on U.S. imports from all countries to 15%, up from 10%, the maximum permitted under existing law.
While trade tensions could weigh on longer-term energy demand, for now the market’s focus remains squarely on geopolitical flashpoints in the Middle East. Any signs of military confrontation or disruptions to shipping routes — particularly through key transit points such as the Strait of Hormuz — could send prices sharply higher.
With diplomatic negotiations approaching and political rhetoric intensifying, oil markets are expected to remain highly sensitive to headlines. Traders are likely to continue pricing in geopolitical risk premiums until greater clarity emerges from the talks and the broader regional situation stabilizes.
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