Oil prices extend gains;Iran talks, Russia-Ukraine tensions hit supply outlook

Published 03/06/2025, 02:34
Updated 03/06/2025, 13:48
© Reuters.

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

 

 

 

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers
© 2007-2025 - Fusion Media Limited. All Rights Reserved.