Oil prices slipped in the global market as signals of renewed nuclear diplomacy between the United States and Iran, expectations of increased OPEC+ output, and concerns over US trade policy combined to ease supply fears.
Brent crude, the international benchmark, edged down 0.21% to $68.41 per barrel from the previous close of $68.56. US benchmark West Texas Intermediate (WTI) also dipped 0.12%, trading at $66.24 per barrel compared to $66.32 in the prior session.
Investor sentiment was tempered by news of potential direct nuclear discussions between Washington and Tehran in Norway next week, reducing fears of further Middle East escalation. Iran reaffirmed its commitment to the Nuclear Non-Proliferation Treaty while announcing changes in its cooperation framework with the International Atomic Energy Agency, following recent tensions over alleged attacks on its nuclear facilities.
The diplomatic developments align with a report that senior US and Iranian officials could meet soon in Oslo, potentially opening a new channel for de-escalation in the region.
Meanwhile, expectations that OPEC+ will further increase output in August are weighing on prices. The alliance, which has gradually eased voluntary production cuts since April, is set to discuss its next output adjustments at a meeting on Sunday, with Saudi Arabia, Russia, and other key members considering a fifth consecutive monthly hike to stabilise supply amid recovering demand.
Adding to the cautious mood in oil markets is the uncertainty surrounding US trade policy. As the July 9 tariff deadline approaches, President Trump indicated that letters will be sent to various countries specifying tariff rates of 20%, 25%, or 30%, heightening concerns over potential impacts on global trade flows and energy demand.
The combination of easing geopolitical tensions, anticipated increases in supply, and trade policy uncertainties is keeping oil markets on edge, with traders closely monitoring developments in the coming days.
