Brent crude futures retreated in Tuesday’s thin Asian trade to approximately 68.10 United States dollars (USD) per barrel, extending a modest pullback from the previous session’s gains as markets shifted focus from supply disruption fears toward the outcome of United States-Iran nuclear negotiations scheduled for later in the day.
The benchmark contract was down 0.47 per cent, or 32 cents, at USD68.33 per barrel by 11:30 pm Eastern Time, following a 1.33 per cent gain on Monday. US West Texas Intermediate (WTI) crude traded at USD63.51 per barrel, though the move incorporated all of Monday’s price action as the contract had no official settlement due to the US Presidents Day public holiday.
Trading volumes were further compressed by Lunar New Year closures across mainland China, Hong Kong, Taiwan, South Korea and Singapore, leaving markets thinly staffed and amplifying the sensitivity of price movements to news flow.
The session’s price action reflected a rapid repricing of geopolitical risk. Confirmation that the US would hold indirect nuclear talks with Iran was seen as a de-escalatory move that pushed oil prices down from the weekly high of USD69.76 per barrel reached on Monday. US President Donald Trump stated he would be involved indirectly in the negotiations and expressed optimism about reaching a potential agreement, though he previously suggested regime change in Iran could be beneficial.
Iran conducted a military drill on Monday in the Strait of Hormuz, a vital international waterway and oil export route used by Gulf Arab states to supply Asian markets. Approximately 20 per cent of the world’s petroleum passes through the narrow seaway, making any disruption to navigation one of the highest-impact scenarios the energy market can contemplate. Iran, alongside fellow Organisation of the Petroleum Exporting Countries (OPEC) members Saudi Arabia, the United Arab Emirates, Kuwait and Iraq, ships the bulk of its crude through the strait.
The diplomatic context for Tuesday’s talks is complex. Trump has warned that consequences would be severe if a deal on Iran’s nuclear programme is not reached, while Tehran reiterated that it will not abandon uranium enrichment. Iran’s atomic chief has separately suggested the country could agree to dilute its most highly enriched uranium in exchange for a full lifting of financial sanctions, a development that would potentially allow additional Iranian barrels to return to global markets.
Supply-side dynamics are simultaneously capping upward price momentum. OPEC+ is leaning toward a resumption in oil output increases from April, according to three OPEC+ sources, as the group prepares for peak summer demand with prices supported by US-Iran tensions. Citigroup said that if disruptions to Russian supply keep Brent in the USD65 to USD70 per barrel range in coming months, OPEC+ is likely to respond by increasing output from spare capacity.
Citi’s base case projects that diplomatic resolutions involving both Iran and the Russia-Ukraine conflict could contribute to a decline in Brent prices toward the USD60 to USD62 per barrel range later this year. BloombergNEF has estimated Brent could average USD55 per barrel through 2026 if the Iranian situation does not disrupt global oil markets, though a complete removal of Iranian crude from markets in an extreme scenario could push prices as high as USD91 per barrel in the fourth quarter.
Traders are also monitoring developments relating to India’s crude purchasing patterns after Trump announced that New Delhi had agreed to stop buying Russian oil as part of a trade arrangement, though India has not officially confirmed the commitment, emphasising that safeguarding its energy security remains a top priority.
Russia-Ukraine peace negotiations beginning in Geneva on Tuesday represent an additional variable. ANZ analysts noted that oil markets remain unsettled amid broader geopolitical risks including the Russia-Ukraine conflict, with a ceasefire or diplomatic breakthrough potentially releasing Russian supply constraints that have underpinned prices in recent weeks.
For Ghana, oil price developments carry direct fiscal implications. Ghana’s government revenues from the Jubilee, TEN and Sankofa offshore fields are calculated against benchmark crude prices, with each USD10 per barrel movement in Brent estimated to affect annual petroleum revenues by approximately USD150 million to USD200 million, according to Public Interest Accountability Committee (PIAC) estimates.
