Oil Prices Steady in Asia as Progress in U.S.–Iran Talks Eases Supply Fears

Oil prices were largely unchanged in Asian trading on Wednesday, stabilizing after sharp losses in the previous session, as signs of progress in U.S.–Iran nuclear negotiations reduced concerns over potential supply disruptions and weighed on geopolitical risk premiums.

As of 21:18 ET (01:18 GMT), Brent crude futures for April delivery edged up 0.1% to $67.51 a barrel, while U.S. West Texas Intermediate (WTI) crude futures also rose 0.1% to $62.40 a barrel.

The modest moves followed a steep selloff on Tuesday, when Brent slid nearly 2% and WTI fell about 1%, as markets reacted to easing geopolitical tensions.

U.S.–Iran Nuclear Talks Show Signs of Progress

Energy markets are closely monitoring diplomatic developments between Washington and Tehran after reports indicated that the two sides reached an understanding on key “guiding principles” during talks on Tuesday. The progress raised expectations that a potential agreement could eventually allow more Iranian crude to return to global markets.

However, Iranian Foreign Minister Abbas Araqchi cautioned that the understanding does not signal an imminent deal, underscoring that negotiations remain complex.

Any breakthrough could have significant implications for oil supply. Iran is a major oil producer and sits along the Strait of Hormuz—a strategically critical chokepoint through which roughly one-fifth of global oil consumption flows each day—making the talks particularly relevant for global energy markets.

Thin Holiday Trade and Data in Focus

Trading volumes in Asia remained subdued, with several regional markets closed for the Lunar New Year holiday, contributing to muted price action.

Investors also stayed cautious ahead of key U.S. supply data. Weekly inventory estimates from the American Petroleum Institute are due later on Wednesday, followed by official figures from the Energy Information Administration on Thursday, both of which will be scrutinized for signals on crude supply and demand balances.

Beyond oil-specific factors, broader macroeconomic developments are also shaping sentiment. Markets are awaiting the minutes from the Federal Reserve’s January policy meeting later on Wednesday, as well as Friday’s U.S. personal consumption expenditures (PCE) inflation report, which could influence expectations for interest rates and, in turn, outlooks for fuel demand.

Overall, oil markets remain finely balanced, with near-term direction hinging on developments in U.S.–Iran diplomacy, U.S. inventory data, and signals from the Federal Reserve.