Oil prices in Asian trade inched up on Tuesday, clawing back some losses after tumbling nearly 3% in the previous session amid fresh signals that supply risks from the Middle East could be loosening.
As of 20:23 ET (00:23 GMT), Brent crude futures for August delivery were up 0.3%, trading at $78.10 per barrel. U.S. West Texas Intermediate futures rose 0.4% to $74.18 per barrel at the same timestamp.
The modest gains followed a sharp selloff that had been triggered by indications the market risk premium tied to Middle East tensions could be unwound. Sentiment improved after Washington issued a 60-day general license that permits the sale, delivery and import of Iranian crude oil and related petroleum products as part of ongoing talks with Tehran.
That temporary sanctions waiver - which also extends to associated banking, insurance and shipping services - has bolstered expectations that Iranian exports could rise in the coming weeks, potentially increasing global supply at a time when concerns over disruptions through the Strait of Hormuz are easing.
Officials on both sides described the latest diplomatic exchanges as moving forward. Iranian officials on Monday characterized the discussions as having made "major progress," and media reports said Tehran had obtained relief for oil and petrochemical exports while negotiators continue working toward a final accord expected within 60 days.
Market participants noted that the prospect of additional Iranian barrels returning to trade has tended to outweigh remaining geopolitical uncertainties. Oil had reached levels above $120 per barrel at the height of the conflict when shipping through the Strait of Hormuz was disrupted, but improved transit conditions and diplomatic momentum have prompted traders to trim the elevated risk premiums that were embedded in prices.
Tuesday’s uptick appeared to be largely a technical rebound following Monday’s steep decline rather than evidence of renewed, broad-based bullishness. Investors remain focused on two linked questions - whether the interim ceasefire framework and negotiating progress can be sustained, and how quickly Iranian exports might recover under the temporary sanctions relief.
Until those uncertainties resolve, oil markets are likely to continue reacting to updates on the negotiations and operational developments in shipping and trade services that would allow exports to resume at greater scale.