Oil Prices Stall as Traders Weigh Iran Talks and Strong Dollar

Oil prices remained stable in Tuesday trading as the market balanced the potential for easing geopolitical tensions against the headwinds from a stronger U.S. dollar.

Brent crude futures saw a slight increase of 6 cents, or 0.1%, to trade at $66.36 per barrel. Meanwhile, U.S. West Texas Intermediate (WTI) crude was up 0.2% at $62.24 per barrel. The muted gains follow a significant drop of over 4% on Monday.

Geopolitical Pressures Ease on US-Iran Dialogue

The primary factor weighing on oil prices is the prospect of de-escalation between the United States and Iran. U.S. President Donald Trump stated that Iran was "seriously talking" with Washington, a comment that signaled a potential thaw in relations.

Further reinforcing this sentiment, officials from both nations confirmed that nuclear talks are scheduled to resume in Turkey on Friday. President Trump cautioned that "bad things could happen" if a deal isn't reached, highlighting the presence of large U.S. warships near Iran.

Dollar Strength and Trade Deals Reshape Demand

Several macroeconomic factors are also influencing the oil market, primarily the strength of the U.S. dollar and a new trade agreement between the U.S. and India.

Strong Greenback Creates Headwind for Crude

The U.S. dollar index hovered near a high of more than a week. A stronger dollar typically dampens demand for oil, as it makes the dollar-denominated commodity more expensive for buyers using other currencies.

US-India Pact to Reroute Global Oil Flows

On the trade front, President Trump announced a deal with India that will significantly alter energy flows. The key terms include:

• The U.S. will slash tariffs on Indian goods from 50% to 18%.

• In return, India will halt its purchases of Russian oil and lower its own trade barriers.

Following a call with Indian Prime Minister Narendra Modi, Trump noted that India has agreed to purchase oil from the United States and possibly Venezuela. This development aligns with India's recent trend of reducing its reliance on Russian crude. According to reports, India's imports from Russia fell from 1.2 million barrels per day (bpd) in January and are projected to decline to 1 million bpd in February and 800,000 bpd in March.

OPEC+ Maintains Steady Production Output

In a move that provides some stability to the market, OPEC+ announced on Sunday that it would keep its oil output targets unchanged for March.

The decision follows a period where the eight-member group—comprising Saudi Arabia, Russia, the United Arab Emirates, Kazakhstan, Kuwait, Iraq, Algeria, and Oman—had previously raised production quotas by approximately 2.9 million bpd from April through December 2025. This increase represented about 3% of global demand.