Oil Prices Rise Amid U.S.-Iran Talks Uncertainty

Alanbatnews -

Oil prices experienced a surge, driven by persistent uncertainty surrounding nuclear talks between the United States and Iran, raising concerns about potential supply disruptions.

The market's apprehension is fueled by the possibility of military action, further contributing to the upward pressure on prices, according to analysts.

Tamas Varga, an oil analyst at PVM, noted that uncertainty and fear are driving prices higher, attributing this to the outcomes of Iranian nuclear talks and potential U.S. military action against Iran.

Brent crude futures advanced by $1.38, or 1.95%, to reach $72.13 a barrel. West Texas Intermediate (WTI) crude climbed by $1.40, or 2.15%, settling at $66.61.

The United States and Iran engaged in indirect discussions in Geneva, following a U.S. military reinforcement in the region. Initial reports of stalled negotiations due to U.S. demands regarding uranium enrichment briefly drove prices up, before a statement from an Omani mediator indicating progress led to a slight price retreat.

Oman's Foreign Minister, Badr al-Busaidi, announced that negotiations would resume at a technical level in Vienna the following week. DBS bank analyst, Suvro Sarkar, suggested the talks offered some hope for a peaceful resolution, while acknowledging that military action remained a possibility.

Former U.S. President Trump had previously stated that Iran had a limited timeframe to agree on its nuclear program, or face severe consequences. Sarkar added that geopolitical risk premiums, estimated at $8-10 per barrel, had increased in oil prices due to concerns that conflict could disrupt Middle East supplies through the Strait of Hormuz, a critical transit point for approximately 20% of global oil supply.

Looking ahead, OPEC+ is expected to consider increasing oil production by 137,000 barrels per day for April during its upcoming meeting, following the suspension of production increases in the first quarter, according to sources.

Brent crude was on track to end the week up 0.2%, while WTI was heading for a 0.1% decline.