Oil prices steady as Russia-Ukraine peace hopes fade, Yemen tensions rise

LONDON: Oil prices were little changed on Tuesday as investors took stock of dented hopes of a Russia-Ukraine peace deal and rising geopolitical tensions in the Middle East around Yemen.

Brent crude futures for February delivery, which expire on Tuesday, were up 32 cents, or 0.52%, at $62.26 a barrel as of 1206 GMT. The more active March contract was at $61.82, up 33 cents, or 0.54%.

U.S. West Texas Intermediate crude gained 32 cents, or 0.55%, to $58.40.

The Brent and WTI benchmarks settled more than 2% higher in the previous session as Saudi Arabia launched airstrikes against Yemen and after Moscow accused Kyiv of targeting a Russian presidential residence, denting hopes of a peace deal.

Russia has said it will toughen its position in peace talks after accusing Kyiv of attacking the residence, an allegation that Kyiv dismissed as baseless and designed to undermine peace negotiations.

“I guess the market has now adapted again its expectation, not looking for any breakthrough for a peace agreement between Ukraine and Russia in the short term,” said UBS analyst Giovanni Staunovo.

The ongoing U.S. blockade of Venezuelan oil and also poor weather suspending Caspian CPC Blend exports were supporting prices on Tuesday, he said.

Also adding to supply concerns were strikes by a Saudi Arabia-led coalition on what it described as foreign military support to UAE-backed southern separatists in Yemen.

Saudi Arabia said on Tuesday its national security was a red line and backed a call for UAE forces to leave Yemen within 24 hours, shortly after a Saudi-led coalition carried out an airstrike on the southern Yemeni port of Mukalla.

Traders also watched other Middle East developments after U.S. President Donald Trump said the United States could support another major strike on Iran were Tehran to resume rebuilding its ballistic missile or nuclear weapons programs.

Despite renewed fears of potential supply disruptions, perceptions of an oversupplied global market remain and could cap prices, analysts say.

Prices are likely to trend downwards in the first quarter of 2026 due to a “growing oil glut”, said Marex analyst Ed Meir.