Oil prices rose on Tuesday despite easing tensions between Iran and Israel, as traders anticipated tighter supplies in the coming months.
The recent easing of tensions between Iran and Israel has reduced the risk premium in crude, but traders still see oil markets tightening in the coming months. This is due to production cuts from Russia and increased fuel demand in the U.S. as the spring season approaches.
The U.S. is also seen tightening its oil export sanctions against Iran, which could further restrict supply.
Brent oil futures expiring in June rose 0.4% to $87.39 a barrel, while West Texas Intermediate crude futures rose 0.5% to $82.32 a barrel by 20:53 ET (00:53 GMT).
Traders are still factoring in geopolitical risks and potential aggression, as Israel continues its strikes against Gaza and Iraqi-based groups threaten to ramp up missile strikes against the U.S. and its allies.
However, the approaching U.S. driving season is expected to spur increased demand in the world’s biggest fuel consumer, supporting oil prices.
