Oil prices remained relatively unchanged on Tuesday, with Brent crude slipping by 6 cents to $65.48 per barrel and U.S. West Texas Intermediate rising by 1 cent to $62.70. Market participants are weighing the possible supply disruptions from stalled U.S.-Iran nuclear talks, which, if successful, could have lifted sanctions and increased Iran’s oil exports by 300,000 to 400,000 barrels per day.
Iranian Deputy Foreign Minister Majid Takhtravanchi indicated that negotiations may collapse if the U.S. insists Iran cease uranium enrichment entirely. Supporting prices, strong physical demand in Asia driven by improved refining margins—averaging over $6 per barrel in May compared to $4.4 in April—and the conclusion of maintenance seasons are expected to bolster regional buying.
However, macroeconomic concerns are tempering gains. Moody’s downgraded the U.S. sovereign credit rating, citing its towering $36 trillion debt, which could affect energy demand. Additionally, slowing industrial output and retail sales in China, the world’s largest oil importer, have raised fears of weakening fuel consumption, with BMI analysts forecasting a 0.3% decline in oil demand for 2025 despite potential government stimulus efforts.
Oil prices are currently influenced by a complex interplay of geopolitical negotiations, regional demand dynamics, and broader economic indicators. The outcome of U.S.-Iran nuclear talks will be a key factor in determining future price movements.