Oil prices rose on Tuesday amid worries that Iran might reject a U.S. nuclear deal proposal, which is key to lifting sanctions. A weaker dollar also supported prices.
Brent crude futures added 12 cents, or 0.19%, to $64.75 a barrel as of 06:27 GMT.
U.S. West Texas Intermediate (WTI) crude futures gained 20 cents, or 0.32%, to $62.72 a barrel. WTI had climbed about 1% earlier in the session.
OPEC+ Decision Bolsters Market
Markets surged on Monday following the OPEC+ decision to keep July output growth at 411,000 barrels per day—the same level as the previous two months and lower than some had feared. ING analysts noted that this “strength continued into early trading today.”
ANZ analysts pointed out that, because the worst-case scenario did not materialize, “investors unwound bearish positions established before the weekend meeting.”
Dollar Weakness Supports Oil
The dollar index, which tracks the greenback against six major currencies, hovered near a six-week low. Traders weighed the impact of President Donald Trump’s tariff policy and its potential to slow growth and push up inflation.
A softer dollar makes oil—priced in dollars—cheaper for buyers using other currencies. “Crude oil prices continued to rise, supported by a weaker dollar,” said Priyanka Sachdeva, senior market analyst at Phillip Nova.
Geopolitical Tensions Add Up
Tensions rose after an Iranian diplomat said on Monday that Tehran would likely reject the U.S. nuclear deal proposal. The diplomat argued that the offer failed to protect Iran’s interests or ease U.S. limits on uranium enrichment.
If talks stall and sanctions remain, Iranian oil supplies would stay restricted, putting upward pressure on prices.
Canadian Wildfires Further Tighten Supply
A massive wildfire in Alberta, Canada, has temporarily halted some oil and gas output. Reuters calculations indicate that over 344,000 barrels per day of oil sands production—about 7% of Canada’s total crude output—have been affected. Reduced Canadian supply adds an extra layer of concern for markets already on edge.
Outlook
With OPEC+ maintaining restrained output growth, geopolitical risks in the Middle East, and supply disruptions in Canada, oil markets face tighter balances. A weaker dollar continues to bolster demand from overseas buyers. Together, these factors have driven oil prices higher in early Tuesday trading.
