Oil Prices Surge Amid Ukraine Tensions and Iran Deal Uncertainty
Oil prices rose on Tuesday, driven by escalating tensions in the Ukraine conflict and uncertainty surrounding the potential collapse of Iran nuclear negotiations, despite ongoing diplomatic efforts.
The petroleum market had already experienced significant gains the previous day, with crude rising nearly 3% after OPEC+ reaffirmed plans to increase July production by 411,000 barrels per day. This figure matched previous monthly targets and fell short of market expectations for more substantial output increases.
As of 1307 GMT, Brent crude was up 58 cents, or 0.9%, at $65.21 per barrel. Meanwhile, U.S. West Texas Intermediate (WTI) crude climbed 67 cents, or approximately 1.1%, to $63.19, according to Reuters.
Market analysts attributed the price gains to renewed concerns over the conflict following intensified weekend military escalations between Ukraine and Russia.
“Risk premia have filtered back into the oil price following deep Ukraine strikes on Russia over the weekend,” said Harry Tchilinguirian, an analyst at Onyx Capital Group.
“But more importantly for the barrel count is the ongoing back-and-forth between the U.S. and Iran over uranium enrichment.”
The weekend saw some of the most intense military exchanges since the conflict began, including major drone operations, destruction of Russian transport infrastructure, and strikes on strategic military installations deep within Russian territory.
At the same time, diplomatic sources indicated that Iran is likely to reject recent U.S. proposals aimed at resolving long-standing nuclear disagreements. Iranian officials said Monday that the current offers do not adequately address Tehran’s concerns or provide meaningful concessions regarding uranium enrichment restrictions.
If nuclear negotiations were to collapse entirely, existing sanctions against Iran would likely remain in place, potentially constraining global oil supplies and lending further support to crude prices.
Additional upward pressure on oil came from currency markets. The U.S. dollar index hovered near six-week lows as investors evaluated the potential impact of President Trump’s trade policies on economic growth and inflation expectations.
A weaker dollar typically supports commodity prices by making oil cheaper for buyers using other currencies.
“Crude oil prices continue to rise, supported by the weakening dollar,” said Priyanka Sachdeva, senior market analyst at Phillip Nova.
Supply concerns were further heightened by production disruptions in Canada, where wildfires in Alberta have affected over 344,000 barrels per day of oil sands operations—roughly 7% of Canada’s total crude output, according to Reuters analysis.
Additional price momentum could follow if the anticipated decline in U.S. crude inventories is confirmed when weekly stockpile data is released.
