Oil prices steady as Trump stresses diplomacy with Iran

Oil prices held steady on Tuesday as renewed diplomatic efforts between the United States and Iran eased some geopolitical tensions, though traders remained cautious about risks that could push crude higher.

US West Texas Intermediate crude was trading around 66 dollars a barrel after ending Monday’s session largely flat. International benchmark Brent crude stood just under 72 dollars a barrel, levels not seen in several months as markets factor in geopolitical uncertainty.

US President Donald Trump reiterated his preference for a negotiated nuclear agreement with Tehran ahead of talks scheduled this week. In a social media post, he said it would be a “very bad day” for Iran if agreement talks collapse, underscoring Washington’s approach of pursuing diplomacy while maintaining pressure.

Trump also dismissed media reports suggesting the Pentagon is concerned that a prolonged military campaign in Iran could prove costly and complex, signalling that the administration remains focused on securing a deal.

Geopolitical risk premiums have been a major factor in oil pricing this year, with markets highly sensitive to disruptions around the Strait of Hormuz, a strategic chokepoint through which a significant share of global oil supplies passes. Recent closures of parts of the strait for Iranian military drills and heightened tensions have pushed tanker rates higher and reinforced perceptions of supply risk.

Analysts said the market remains finely balanced. While there is optimism that nuclear negotiations scheduled in Geneva later this week could reduce the risk of confrontation, traders continue to factor in a geopolitical premium given the possibility that diplomacy could falter.

Despite concerns over conflict, global inventories remain ample. Analysts noted that without an actual disruption to flows through key routes such as Hormuz, prices may remain capped even amid heightened rhetoric.