Oil prices flat as markets await geopolitical and economic developments

Oil prices were little changed on Tuesday as the market waited for direction from news on diplomatic relations between the US and Iran, efforts to end Russia's war in Ukraine and data on the US economy and US oil inventories.

Brent futures fell 24 cents, or 0.3 per cent, to settle at $68.80 a barrel, while US West Texas Intermediate crude fell 40 cents, or 0.6 per cent, to settle at $63.96.

Traders are, "hesitant to press either direction until there is a clearer signal from diplomacy, the next inventory prints, or any confirmation that supply flows are being materially affected rather than merely threatened," analysts at energy consulting firm Gelber Associates said in a note.

Nuclear talks with the US allowed Tehran to gauge Washington's seriousness and showed enough consensus to continue on the diplomatic track, Iran's foreign ministry spokesperson said on Tuesday.

US and Iranian diplomats held talks through mediators in Oman last week in an effort to revive diplomacy, after US President Donald Trump positioned a naval flotilla in the region, raising fears of new military action. "The market is still focussed on the tensions between Iran and the US," said Tamas Varga, oil analyst at brokerage PVM.

"But unless there are concrete signs of supply disruptions, prices will likely start going lower." About one-fifth of the oil consumed globally passes through the Strait of Hormuz between Oman and Iran, making any escalation in the area a major risk to global oil supplies.

Iran and fellow Organisation of the Petroleum Exporting Countries (OPEC) members Saudi Arabia, United Arab Emirates, Kuwait and Iraq export most of their crude via the strait, mainly to Asia.

Iran was the third-biggest crude producer in OPEC behind Saudi Arabia and Iraq in 2025, according to US Energy Information Administration data.