Oil prices rose in Asian trade on Tuesday, extending sharp gains from the prior session as uncertainty over a U.S.-Iran nuclear deal and worsening tensions between Ukraine and Russia heralded more potential supply disruptions.
Gains in oil came after recent wildfires in Canada’s oil-producing province, Alberta, stood to impact output. Markets were also cheered by the Organization for Petroleum Exporting Countries and allies (OPEC+) agreeing to increase production in line with market expectations.
A deadly drone strike by Ukraine against Russia also ramped up concerns over more geopolitical disruptions to oil supply, as did a report that the U.S. was considering even stricter sanctions on Russia’s oil industry.
Brent oil futures rose 0.8% to $65.17 a barrel, while West Texas Intermediate crude futures rose 0.9% to $62.04 a barrel by 21:19 ET (01:19 GMT).
Iran nuclear deal in question, Trump says no uranium enrichment Ongoing Iran-U.S. talks provided mixed signals on whether consensus will be reached. A senior Iranian official said on Monday that Tehran was preparing to reject a U.S. proposal.
Reports said that the U.S. was preparing to allow Iran to enrich some uranium. But U.S. President Donald Trump said on Monday that he will not allow the country to enrich any uranium, which could be a major point of contention for Tehran.
A nuclear deal was expected to free up Iran’s oil exports, which are currently subject to strict U.S. sanctions. The lack of an agreement will keep these restrictions in place, limiting global oil supplies.
US-Russia sanctions in focus as Ukraine ceasefire appears distant Expectations of tighter supplies were also fueled by reports that U.S. lawmakers were considering even stricter sanctions against Russia’s energy industry, this time targeting major buyers China and India.
Considerations for tighter Russian sanctions come amid little progress towards a Russia-Ukraine ceasefire, with Moscow only agreeing to end the war if Kyiv surrenders large chunks of its territory.
Peace talks held on Monday were short-lived, especially as they came after a devastating Ukrainian drone strike deep in Russian territory over the weekend.
U.S. President Donald Trump’s calls for a ceasefire also appear to have gone largely ignored by Moscow, a trend that could invite even more U.S. restrictions.
