Oil Prices Steady as Markets Weigh U.S.-Iran Talks, Dollar Strength Caps Gains

Oil prices edged slightly higher on Tuesday as investors balanced easing geopolitical tensions between the United States and Iran against pressure from a stronger U.S. dollar. The cautious tone in global energy markets followed sharp losses a day earlier, when signals of renewed diplomacy reduced fears of supply disruptions in the Middle East.

Brent crude futures rose modestly by 6 cents, or 0.1%, to trade around $66.36 per barrel in early Asian hours, while U.S. West Texas Intermediate (WTI) crude gained about 0.2% to $62.24 per barrel. Despite the small uptick, crude prices remained under pressure after falling more than 4% on Monday.

The earlier decline came after U.S. President Donald Trump said Iran was “seriously talking” with Washington, suggesting a possible de-escalation in long-running tensions with the OPEC member. According to Reuters, officials from both countries confirmed that Iran and the U.S. are expected to resume nuclear talks in Turkey later this week. While Trump warned that failure to reach an agreement could have serious consequences, the prospect of dialogue eased immediate concerns about supply risks, weighing on oil prices.

Adding further pressure, the U.S. dollar index hovered near a more-than-one-week high. A firmer dollar typically makes dollar-denominated commodities such as crude oil more expensive for buyers using other currencies, dampening global demand.

On the trade front, markets also reacted to news of a new U.S.-India agreement. Trump announced that Washington would cut tariffs on Indian goods to 18% from 50% in exchange for India halting purchases of Russian oil and reducing trade barriers. India has already begun slowing its imports from Russia, with volumes expected to fall from around 1.2 million barrels per day in January to roughly 800,000 bpd by March. Under the deal, India is expected to increase oil purchases from the U.S. and potentially Venezuela.

Meanwhile, OPEC+ confirmed it would keep oil output unchanged for March. However, the group previously agreed to raise production quotas by about 2.9 million bpd between April and December 2025, a move equivalent to roughly 3% of global oil demand. This planned supply increase continues to shape longer-term oil price expectations.