Oil slipped yet held close to six‑month peak ahead of US‑Iran talks and tariff uncertainty

Oil prices edged lower on Monday but held near six-month highs, as investors weighed the prospect of renewed US-Iran nuclear negotiations against lingering geopolitical risks and fresh economic uncertainty following the latest US tariff developments.

Brent crude settled at $71.49 a barrel, down 27 cents, or 0.38%, while US WTI slipped 17 cents, or 0.26%, to $66.31. Both benchmarks remained elevated after rallying nearly 6% last week, when US President Donald Trump said he was considering a potential military strike on Iran, injecting a sharp risk premium into the market.

Tehran has since signalled it is prepared to offer concessions on its nuclear programme in exchange for sanctions relief and formal recognition of its right to enrich uranium. A third round of talks between Washington and Tehran is scheduled to take place in Geneva on Thursday. Despite tentative diplomatic progress, traders remain cautious, with many continuing to price in the risk of escalation.

Any military conflict could disrupt flows through the Strait of Hormuz, a critical chokepoint for crude exports from the Middle East. Saudi Arabia, Iraq and Kuwait route most of their shipments through the waterway, largely destined for Asian buyers. Iran, which produces more than 3 million bpd of crude, exports the bulk of its volumes to China. Options markets have reflected these concerns, with traders paying elevated premiums in recent weeks to hedge against a potential price spike.

Broader macroeconomic uncertainty also capped gains. A recent US Supreme Court ruling that struck down key elements of President Trump’s tariff plans has revived questions over trade policy direction, weighing on equity markets and tempering oil’s upward momentum.

Written by: Farid Muzaffar