Oil prices edged lower on Tuesday as traders reassessed geopolitical risks in the Middle East following a strong rally in the previous session with attention focused on shipping security around the Strait of Hormuz.
Brent crude oil, against which Nigerian crude oil is priced, fell 16 cents, or 0.23% to $68.88 a barrel, while U.S. West Texas Intermediate declined 20 cents, or 0.31% to $64.16 a barrel by early European trading.
The pullback followed gains of more than 1% on Monday, when heightened concerns over potential supply disruptions lifted prices.
Market sensitivity remains elevated after U.S. maritime authorities issued guidance advising U.S.-flagged commercial vessels to exercise caution when transiting near Iranian waters.
The advisory has reinforced concerns over the security of oil flows through the region, even as no direct disruption has occurred.
The Strait of Hormuz remains one of the most critical chokepoints in the global oil market, with roughly one-fifth of the world’s crude consumption transported through the narrow passage.
Major producers including Saudi Arabia, the United Arab Emirates, Kuwait, Iraq, and Iran rely heavily on the route to supply Asian markets.
Diplomatic signals have provided some restraint to price movements. Iran has indicated that Oman-mediated discussions with the United States have begun on a constructive footing, reducing fears of immediate escalation while leaving longer-term risks unresolved.
According to Tony Sycamore, crude prices continue to reflect a balance between cautious optimism and persistent uncertainty.
He noted that while dialogue has improved the tone, concerns around sanctions, shipping security, and potential escalation are keeping a risk premium embedded in the market.
Beyond the Middle East, traders are also watching developments in Europe, where the European Union is considering expanding sanctions on Russian oil to include ports in third countries that handle Russian shipments
The move could further tighten enforcement and complicate global crude trade flows.
In Asia, refiners are adjusting procurement strategies. Indian Oil Corporation has increased crude purchases from West Africa and the Middle East, according to market participants, as India reassesses sourcing amid broader trade discussions with the United States.
Overall, oil prices remain range-bound, with modest declines driven by profit-taking offset by lingering geopolitical risks. Analysts say further direction will depend on developments around Middle East security, sanctions enforcement, and demand signals from major consuming economies.
