Summary
- Both crude benchmarks hover near seven-month highs
- US-Iran tensions key market driver in near term, analysts say
- US tariff situation creating market uncertainty
(Reuters) – Oil prices hovered near seven-month highs on Tuesday, with traders assessing risks to supply from any military escalation as another round of U.S.-Iran nuclear talks loomed.
Brent crude futures were unchanged at $71.49 a barrel at 1037 GMT, while U.S. crude futures climbed 11 cents, or 0.2%, to $66.42 a barrel.
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Brent is trading at its highest since late July, while WTI is at its firmest since early August.
Iran and the U.S. will hold a third round of nuclear talks on Thursday in Geneva, Oman’s Foreign Minister Badr Albusaidi said on Sunday.
The United States wants Iran to give up its nuclear programme, but Iran has adamantly refused, and denied it is trying to develop an atomic weapon.
The State Department is pulling out non-essential government personnel and their families from the U.S. embassy in Beirut, a senior State Department official said on Monday, amid growing concerns about the risk of a military conflict with Iran.
U.S. President Donald Trump said in a social media post on Monday that it will be a “very bad day” for Iran if it does not make a deal.
“The risk is not necessarily that war is the base case, but that escalation becomes difficult to unwind once positioning and expectations are elevated,” SEB analysts said in a note.
“That is the uncomfortable dynamic currently underpinning the geopolitical premium in oil.”
On the trade policy front, Trump on Monday warned countries against backing away from recently negotiated trade deals with the U.S. after the Supreme Court struck down his emergency tariffs, saying that he would hit them with much higher duties under different trade laws.
Trump said on Saturday he would raise a temporary tariff to 15% from 10% on U.S. imports from all countries, the maximum level allowed under the law.
Additional reporting by Trixie Yap in Singapore and Anushree Mukherjee in Bengaluru; Editing by Jacqueline Wong, Muralikumar Anantharaman and Jan Harvey
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