Oil Holds Steady Amid Geopolitical Moves and Supply Concerns

Highlights:

• Oil prices steadied as the U.S. prepares to restart nuclear talks with Iran, with WTI trading above US$67 and Brent just below US$69 at the time of writing.
• Geopolitical tensions ease slightly, but investors remain cautious ahead of Sunday’s OPEC+ meeting, where a further supply increase is expected.
• Canadian wildfires near Fort McMurray threaten oil sands operations, adding to global supply concerns alongside falling output from Mexico and Venezuela.

Talks With Iran Resurface

Crude oil prices remained largely unchanged following a brief decline triggered by news of potential nuclear negotiations between the United States and Iran. According to Axios, the U.S. plans to reopen diplomatic dialogue, with Middle East envoy Steven Witkoff scheduled to meet Iranian Foreign Minister Abbas Araghchi in Oslo next week. At the time of writing, West Texas Intermediate (WTI) was trading just above US$67 per barrel, while Brent crude hovered below US$69. The news came alongside fresh sanctions from Washington aimed at restricting Iranian oil trade, maintaining pressure on Tehran despite the resumption of talks.

Market Calms After Volatility

Recent weeks have seen oil markets swing due to fears of supply disruption amid escalating tensions between Israel and Iran. However, those concerns have somewhat eased, with investor attention now turning to global trade negotiations and the upcoming OPEC+ meeting scheduled for Sunday. Analysts widely expect the oil-producing alliance to announce another significant boost in output, which could influence short-term price dynamics.

Canadian Wildfires Add to Supply Risks

Meanwhile, in Canada, a wildfire near Fort McMurray—just 20 kilometers from a major oil sands operation—has raised alarms over potential disruptions. In May, Alberta's crude production dropped to its lowest level in two years due to similar wildfire threats. This decline, coupled with reduced output from Mexico and an ongoing U.S. ban on Venezuelan oil, has led to firmer prices for heavy crude grades.

As supply factors tighten and geopolitical developments evolve, energy traders remain on edge, closely monitoring diplomatic shifts and natural disruptions that could further impact the global oil landscape.

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