Why are oil prices swinging wildly today? Iran-US talks and supply risks rattle markets

Dubai: Brent crude prices are swinging sharply again, and for good reason — a mix of geopolitical tension, uncertain demand, and confusing supply signals is making oil markets especially jittery. After climbing briefly on Tuesday, Brent turned lower again, trading around $64 a barrel.

The key driver behind this latest volatility? Talks between the US and Iran — or more accurately, the lack of clarity around them.

Iran’s Supreme Leader Ayatollah Ali Khamenei cast doubt on the outcome of the ongoing negotiations, saying he’s not optimistic about a deal and urged the US to “stop talking nonsense.” These comments briefly sent oil prices higher, but the gains didn’t hold. Investors are watching every statement closely, because any progress — or setback — in these nuclear talks could directly impact the oil market.

Why does this matter for prices?

If Iran and the US reach a nuclear deal, sanctions could ease, and that would likely flood the market with more Iranian oil. At a time when global demand is already cooling, the idea of extra barrels entering the mix is triggering sell-offs.

Even though Iran has been exporting some oil under current sanctions, a formal agreement could unlock much more supply — and that’s what markets are reacting to.

Adding to this uncertainty, US President Donald Trump said the countries are “getting close” to a deal, but there's been no confirmation yet. The possibility alone is enough to rattle traders and cause wild price swings.

Demand is slowing down too

It’s not just about Iran. The International Energy Agency (IEA) recently slashed its forecast for global oil demand growth. After a strong start to the year, the IEA now expects demand to grow by just 650,000 barrels per day for the rest of 2025 — down from nearly 1 million barrels per day earlier.

Economic slowdowns in key markets like China and India are starting to show up in fuel consumption data. For UAE consumers and businesses that rely on global energy trends, this slowing demand is another factor keeping prices on edge.

Supply could get messy — again

Meanwhile, producers like OPEC+, including Saudi Arabia and Russia, have already committed to raising output through June. If the Iran deal gets signed too, the market could be flooded with more oil than it needs.

This imbalance — too much oil and not enough demand — could cause stockpiles to grow and prices to fall further. For UAE buyers, that might translate into lower fuel prices locally, as the country adjusts retail fuel prices monthly based on global oil trends.

At the same time, US shale production remains resilient. ConocoPhillips CEO Ryan Lance said production won’t decline unless prices drop into the $50s. As long as prices stay above $60, he expects output to hold steady — another factor keeping supplies high.

So, what’s next for oil?

The short answer? More volatility. Oil markets are stuck between hopes for supply relief and fears of demand stagnation. Traders are in wait-and-watch mode, reacting to every new comment from political leaders and market analysts.

While the current trend points to softer prices in the near term, surprises are always around the corner. Any geopolitical tension — from Iran to Russia — or sudden supply disruptions could trigger sharp moves in either direction.

For now, UAE businesses and consumers can expect continued oil price swings, with downward pressure likely to persist unless a major change shifts the balance.