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Crude oil prices edged higher on Tuesday, shaking off earlier losses in Asian trading as geopolitical tensions resurfaced and overshadowed ongoing concerns about global oversupply. With trading volumes thinned by the year-end holiday period, political headlines had an outsized impact on market sentiment.
West Texas Intermediate crude climbed above $58 per barrel, while Brent crude traded near $62, as investors reassessed risk following fresh signals of possible escalation in the Middle East.
Trump’s Iran Remarks Inject Fresh Uncertainty
The rebound in oil prices followed stark comments from U.S. President Donald Trump, who warned that Washington could take military action if Iran resumes work related to its nuclear program. The remarks revived fears of potential supply disruptions in one of the world’s most strategically sensitive energy regions.
Markets remain highly reactive to any threat involving Iran, given its role in global oil supply and the vulnerability of key shipping routes. Even without immediate action, the possibility of escalation was enough to push prices higher.
Russia-Ukraine Tensions Add to Market Anxiety
Oil prices also drew support from developments linked to the war in Ukraine. Reports suggested that Russian President Vladimir Putin raised concerns with Trump after Moscow claimed a drone attack targeted one of the Russian president’s residences.
While diplomatic dialogue between Russia and the United States is expected to continue, Russian officials signaled that the incident would not go unanswered, reinforcing fears of prolonged instability affecting energy exports.
Natural Gas Joins the Upward Move
Beyond crude oil, natural gas prices also advanced, reflecting broader volatility across energy markets. Seasonal demand, weather-related factors, and geopolitical uncertainty combined to keep price action elevated across the complex.
Geopolitics Trump Fundamentals—for Now
As 2025 approaches its end, oil markets remain caught between two opposing forces: ample global supply and persistent geopolitical flashpoints. For the moment, comments from Donald Trump and rising international tensions are outweighing fundamental pressures, keeping crude prices supported even as stronger gains remain capped.
