Oil prices edge lower as US-Iran talks uncertainty keeps markets cautious

Brent crude futures declined by 75 cents, or 0.79%, to $94.23 per barrel at 0434 GMT, while US West Texas Intermediate (WTI) dropped 85 cents, or 0.92%, to $91.31 per barrel.

SINGAPORE: (UrduPoint/UrduPoint / Pakistan Point News-June 2nd, 2026) Oil prices slipped on Tuesday after sharp gains in the previous session, as investors remained uncertain over the progress of United States–Iran peace negotiations.

US President Donald Trump said on Monday that discussions with Iran were still ongoing, although Iran’s Tasnim news agency reported that Tehran had suspended indirect talks with Washington.

Brent crude futures declined by 75 cents, or 0.79%, to $94.23 per barrel at 0434 GMT, while US West Texas Intermediate (WTI) dropped 85 cents, or 0.92%, to $91.31 per barrel.

Both benchmarks had surged more than 5% in the previous trading session, after recording losses of over 16% in May amid expectations of a possible diplomatic breakthrough.

Market analysts said sentiment remained highly sensitive to conflicting signals from both sides.

“While markets had hoped to move past the uncertainty amid prospects of a potential deal, nothing appears to have changed for oil as of this morning,” said Priyanka Sachdeva, senior market analyst at Phillip Nova.

In separate remarks to CNBC on Monday, Trump suggested he would not be concerned if the talks ended, but later posted on social media that discussions were still underway. He also told ABC News he expected a possible agreement that could extend a ceasefire and reopen the Strait of Hormuz within the coming week, according to a post shared on X.

Analysts said traders were closely monitoring diplomatic developments as well as any threats related to the Strait of Hormuz, a key global shipping route.

“The market is currently focused on whether there is tangible progress or setbacks in US-Iran negotiations, the tone of statements from both sides, and physical tanker movements through the Strait of Hormuz,” said Tim Waterer, chief market analyst at KCM Trade.

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He added that the direction of negotiations would determine whether the current geopolitical risk premium in oil prices persists or fades.

Elsewhere in the region, Lebanon announced a partial ceasefire between Hezbollah and Israel on Monday, signalling a limited de-escalation of tensions linked to broader regional conflict.

“With headlines continuing to emerge from the middle East, oil prices are likely to remain volatile until clearer signs of a sustained agreement appear,” said Tony Sycamore, market analyst at IG.

Iran has reportedly restricted much of non-Iranian shipping in and out of the Gulf since the conflict escalated, affecting nearly one-fifth of global oil and liquefied natural gas flows and pushing prices higher.

Meanwhile, US crude exports rose to a record 5.6 million barrels per day in May as Middle East tensions increased demand from Asian and European refiners, according to ship-tracking data.

A preliminary Reuters poll indicated that US crude inventories likely fell by about 3.6 million barrels in the week ending May 29, marking a continued drawdown, while gasoline and distillate stocks also declined.

Shipping industry representatives meeting in Athens on Monday said any potential US-Iran agreement would need to clearly define navigation rules for vessels operating through the Strait of Hormuz to restore normal trade flows.