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Investing.com--Oil prices rose Tuesday, extending sharp gains from the prior session as uncertainty over a U.S.-Iran nuclear deal and rising tensions between Ukraine and Russia heralded more potential supply disruptions.
At 08:45 ET (12:45 GMT), Brent oil futures rose 1.2% to $65.41 a barrel and West Texas Intermediate crude futures rose 1.4% to $63.40 a barrel.
The crude market had gained nearly 3% on Monday after the Organization of the Petroleum Exporting Countries and allies, known as OPEC+, kept its July output hike at 411,000 barrels per day, the same as earlier months and less than some in the market had feared.
Iran nuclear deal in question, Trump says no uranium enrichment
Ongoing Iran-U.S. nuclear talks have provided a boost to the crude market, as doubts have emerged over whether an agreement can be reached.
A senior Iranian official said on Monday that Tehran was preparing to reject a U.S. proposal, while 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.
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.
Alberta wildfires shut down supply
Gains in oil were also supported by recent wildfires in Canada’s oil-producing province, Alberta, which stood to impact output.
"Roughly 350k b/d of oil production is being shut down, which is around 7% of total Canadian oil production," said analysts at ING, in a note.
Ambar Warrick contributed to this article