Oil prices edged higher on Tuesday after an earlier decline, as diplomatic efforts in Tehran offered some relief from geopolitical tensions in the Middle East. Brent crude futures rose by 40 US cents, or 0.4 per cent, to US$116.24 a barrel, while U.S. West Texas Intermediate crude gained 30 US cents, or 0.3 per cent, to US$102.07. Both benchmarks had dropped by about 1 per cent earlier in the session.
Saudi Arabia, Turkey, and Pakistan held talks with Iranian officials in Tehran on Monday, aiming to reduce regional tensions. The four countries agreed to continue discussions to strengthen cooperation in peace and security, according to Iranian state media. However, renewed attacks by Iran-aligned Houthis on Saudi Arabia underscored the ongoing risks to supply.
Analysts noted that oil prices remain elevated due to persistent geopolitical uncertainties. Sugandha Sachdeva, founder of SS WealthStreet, attributed earlier profit-taking to hopes of a breakthrough in U.S.-Iran talks. Last week, Brent prices surged to over US$117 a barrel, the highest since April, following Iranian attacks on tankers near the Strait of Hormuz.
The Strait of Hormuz, a critical waterway for global energy supplies, has seen heightened maritime security incidents this October. Data from a Washington-based think tank showed it was the worst month for attacks on commercial shipping since 2017. ANZ Research highlighted vulnerabilities in the oil market, including supply disruptions, logistics challenges, and low global distillate inventories.