Oil prices remained stable on Tuesday amid diminishing hopes for a Russia-Ukraine peace agreement and escalating tensions in the Middle East, particularly in Yemen. Brent crude futures for February rose by 27 cents to $62.21 a barrel, while U.S. West Texas Intermediate crude increased by 36 cents to $58.44. The previous session saw both benchmarks settle over 2% higher due to Saudi airstrikes in Yemen and accusations from Russia against Ukraine regarding an attack on a presidential residence, which Ukraine denied.
Analysts suggest that market expectations have adjusted, with little anticipation of a short-term breakthrough in peace talks between Russia and Ukraine. Additionally, ongoing U.S. sanctions on Venezuelan oil and adverse weather affecting Caspian CPC Blend exports have contributed to price support. Supply concerns were heightened by Saudi-led coalition strikes against military support for UAE-backed separatists in Yemen.
In response to regional developments, Saudi Arabia emphasized national security and called for UAE forces to withdraw from Yemen. Meanwhile, the UAE expressed disappointment over Saudi actions. Despite concerns about potential supply disruptions, analysts caution that perceptions of an oversupplied global market could limit price increases, predicting a downward trend in early 2026 due to a growing oil glut.
