By Laila Kearney
(Reuters) – Oil prices edged up on Tuesday on a potential breakdown in talks between the U.S. and Iran over Tehran’s nuclear program and the weakened prospects of more Iranian oil supplies entering the global market.
Brent futures rose 12 cents to $65.66 a barrel by 0008 GMT. U.S. West Texas Intermediate crude futures climbed 16 cents to $62.85.
Discussions between Iran and the U.S. over Tehran’s nuclear program “will lead nowhere” if Washington insists that Tehran slashes its uranium enrichment activity entirely, Iran’s Deputy Foreign Minister Majid Takhtravanchi was quoted saying in state media on Monday.
On Sunday, U.S. special envoy Steve Witkoff reiterated that Washington would require any new deal between the U.S. and Iran would include an agreement to refrain from enrichment, a precursor to the development of nuclear bombs.
An agreement between the two sides would have paved the way for the easing of U.S. sanctions and allowed Iran to raise its oil exports by 300,000 barrels to 400,000 barrels per day, StoneX analyst Alex Hodes said.
A U.S. sovereign downgrade by Moody’s, meanwhile, dampened the economic outlook for the world’s biggest energy consumer and kept oil prices from rising higher. The ratings agency cut America’s sovereign credit rating by one notch on Friday, citing concerns about the nation’s growing $36 trillion in debt.
Additional pressure on oil prices was exerted by data showing decelerating industrial output growth and retail sales in China, the world’s top oil importer.
Prices could whipsaw in the near term on tariffs, U.S.-Iran talks, economic uncertainty and the war between Russia and Ukraine.
Russian President Vladimir Putin, after a call with Trump on Monday, said Moscow was ready to work with Ukraine on a memorandum about a future peace accord and that efforts to end the war were on the right track.
(Reporting by Laila Kearney; Editing by Jacqueline Wong)
