Geopolitics Pushes Oil Near 7-Month High
Oil prices rose on Tuesday (February 24th), approaching a seven-month high, as market participants assessed potential supply risks stemming from a possible military escalation ahead of a new round of US-Iran nuclear talks. The increase was driven by rising risk premiums, despite no tangible supply disruptions yet.
Brent futures rose 48 cents (0.7%) to US$71.97 per barrel at 06:58 GMT, while WTI rose 45 cents (0.7%) to US$66.76 per barrel. Brent is at its strongest level since July 31st, while WTI reached its highest level since August 1st.
Several analysts believe geopolitical factors are the primary driver of this rally. Phillip Nova stated that the current strength in oil prices is driven more by anticipation, rather than actual supply losses. In other words, the market is "factoring in" the worst-case scenario into prices.
The third round of US-Iran nuclear talks is scheduled for Thursday in Geneva, as stated by the Omani Foreign Minister. The US government is pushing Iran to halt its nuclear program, while Iran refuses and insists it is not seeking to develop nuclear weapons. This tension makes market sentiment highly reactive to diplomatic developments and rhetoric.
Fears of escalation increased after the US State Department withdrew non-essential personnel and their families from the US Embassy in Beirut. At the same time, President Donald Trump again warned that it would be a "very bad day" for Iran if a deal was not reached—a statement that reinforced the perceived risk of conflict.
From a technical perspective, OANDA assesses that geopolitical factors are likely to remain the primary driver of oil prices in the short term. For WTI, short-term bullish dynamics are still evident as long as prices remain above the 20-day moving average, with the area around US$63.90 seen as a key support.
Beyond geopolitics, the market is also monitoring US trade policy. Trump has warned countries against withdrawing from negotiated trade deals and has left open the possibility of imposing higher tariffs through other legal means.
UOB analysts believe tariff uncertainty risks weighing on global growth prospects and energy demand, making oil prices sensitive to shifts in sentiment—caught between geopolitical premiums and demand concerns.
Source: Newsmaker.id
