Oil prices remained largely steady as traders and investors carefully weighed potential disruptions to supply ahead of critical nuclear negotiations between the United States and Iran. The geopolitical backdrop, coupled with recent military activities near key oil shipping routes, has maintained a sense of cautious vigilance in the markets.

On Tuesday, oil markets saw prices hold firm despite some earlier volatility. This calm in pricing comes as Iran executed naval drills near the strategically significant Strait of Hormuz — a vital chokepoint for global oil transportation. This move added a layer of tension, reminding traders of the fragility of oil supplies in the region, especially just before the highly anticipated talks aimed at de-escalating U.S.-Iran tensions.

The forthcoming negotiations have significant implications for global oil markets. A successful diplomatic outcome could ease fears over supply interruptions, which have historically led to price spikes. Conversely, if talks falter, the risk of supply disruptions may keep prices elevated or even push them higher, reflecting the premium markets place on geopolitical stability.

Market analysts are also factoring in anticipated changes in oil production from OPEC+. The oil cartel and its allies have reportedly been leaning toward increasing output from April amid expectations of higher summer demand. This strategy aims to balance the market by offsetting supply risks emanating from geopolitical uncertainties.

Financial institutions like Citi have weighed in with projections suggesting that if the US-Iran negotiations and the ongoing Russia-Ukraine oil supply situation both move toward resolution by or during this summer, Brent crude prices could potentially ease to around $60-62 per barrel. Such an outcome would mark a significant adjustment from the current price levels, which reflect ongoing geopolitical jitters and supply concerns.

Meanwhile, India continues to diversify its crude oil sources amid these uncertainties. Recent purchases from West Africa and the Middle East underscore a strategic move to reduce dependency on Russian oil as New Delhi pursues broader trade agreements with Washington. This diversification effort highlights the interconnectedness of global oil markets and geopolitical dynamics.

Overall, the oil market currently reflects a balance between supply concerns driven by geopolitical risk and potential easing through diplomatic developments and strategic production adjustments. Traders remain vigilant, knowing that any shift in the US-Iran relationship or OPEC+ production plans could quickly influence market dynamics.

In summary, as the world watches the US-Iran talks unfold, oil market participants are bracing for the potential outcomes that could either calm or roil global oil supplies. Until then, prices are expected to stay relatively stable but sensitive to news flow, underscoring the fragile equilibrium within the global energy landscape.