Oil Slips as Markets Await US–Iran Signals, Ukraine Peace Moves

By Adedapo Adesanya

Oil went down less than 1 per cent on Tuesday as the markets waited for direction from news on diplomatic relations between the US and Iran, while the traders monitored efforts to end Russia’s war in Ukraine.

Brent futures fell 24 cents or 0.3 per cent to settle at $68.80 a barrel, while US West Texas Intermediate (WTI) crude declined by 40 cents or 0.6 per cent to $63.96 per barrel.

US and Iranian diplomats held talks through mediators in Oman last week in an effort to revive diplomacy, after President Donald Trump positioned a naval fleet in the region, raising fears of new military action.

According to Iran’s foreign ministry spokesperson on Tuesday, nuclear talks with the US allowed Iran to gauge the seriousness of the American government and showed enough consensus to continue on the diplomatic track.

Market analysts noted that unless there are concrete signs of supply disruptions, prices will likely start going lower, especially since there was no blockade to the Strait of Hormuz. About a fifth of the oil consumed globally passes through the Strait of Hormuz between Oman and Iran, making any escalation in the area a major risk to global oil supplies.

Iran and fellow Organisation of the Petroleum Exporting Countries (OPEC) members Saudi Arabia, United Arab Emirates, Kuwait and Iraq export most of their crude via the strait, mainly to Asia.

The European Union (EU) is moving to propose a list of concessions that Europe should demand from Russia as part of a settlement to end the war in Ukraine. The move is part of efforts to squeeze Russian revenue. Russia was the world’s third-biggest crude producer behind the U.S. and Saudi Arabia in 2025.

Reuters reported that already, India, through its state oil company, Indian Oil Corporation (IOC), bought six million barrels of crude from West Africa and the Middle East, traders said, as India steered clear of Russian oil.

The American Petroleum Institute (API) estimated that crude oil inventories in the US increased by a whopping 13.4 million barrels in the week ending February 6. Official data from the Energy Information Administration (EIA) will be released later on Wednesday.