DTN Oil Update
Oil Prices Fall on US-Iran Talks Progress
VIENNA (DTN) -- Oil and product futures mostly slid Tuesday morning after Iran's foreign minister signaled substantive progress in talks with the United States, which is attempting to shut down Tehran's nuclear program.
In crude, NYMEX WTI futures for March delivery slid $0.20 to $62.69 bbl, and ICE Brent for April delivery fell $1.01 to $67.64 bbl.
Downstream, front-month ULSD futures were down $0.0032 to $2.3847 gallon. RBOB for March delivery bucked the trend, rising $0.0038 to $1.9148 gallon.
The U.S. Dollar Index strengthened 0.446 points to 97.265 against a basket of foreign currencies.
Following indirect negotiations between U.S. and Iranian negotiators in Geneva earlier Friday, Iran's foreign minister Abbas Araghchi said the two parties had reached an "understanding on main principles," and have a "clearer path forward". Following the remarks, front-month WTI futures briefly plunged $0.85 bbl.
Oil prices rose earlier on Tuesday after Iran announced it will close the Strait of Hormuz for a few hours for a military drill. Prices soon steadied, as the announced temporary closure of the vital oil chokepoint was interpreted as an Iranian show of force with negligible impact on global supply.
A rising geopolitical risk premium tied to U.S.-Iran tensions has so far this year supported prices against an otherwise bearish backdrop of market fundamentals. The International Energy Agency in its latest monthly oil market report published Thursday, Feb. 12, cut demand growth expectations for 2026, forecasting a 3.7 million bpd crude oversupply this year.
Meanwhile, supply constraints elsewhere prevented a deeper price plunge. Ukraine on Tuesday announced it had struck yet another refinery inside Russia, ahead of trilateral talks scheduled for today. The outcome of negotiations brokered by the U.S. in Geneva is another factor keeping oil price volatility elevated.
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