Core Viewpoint - Oil prices are experiencing volatility due to geopolitical tensions and ongoing negotiations between the U.S. and Iran regarding nuclear and military issues, with market reactions reflecting deep distrust between the two nations [1][3][6]. Group 1: Oil Price Movements - Oil prices fell on Tuesday despite a winter storm impacting crude production and refineries on the U.S. Gulf Coast [1] - U.S. crude oil decreased by 1.4% to $64.26 per barrel, while global benchmark Brent also fell by 1.4% to $68.49 per barrel [2] - Prices dropped again on Thursday following the announcement of talks between Washington and Tehran, although analysts warn that markets may be over-interpreting diplomatic signals [3] Group 2: Geopolitical Tensions - U.S. President Trump has indicated potential military action against Iran if negotiations fail, contributing to market uncertainty [3] - Analysts suggest that the buildup of U.S. military assets in the region indicates a higher likelihood of conflict, which is reflected in the oil price premium [5] - The potential for Iran to threaten oil tankers in the Strait of Hormuz poses a significant risk to oil supply and could lead to price spikes [7] Group 3: Market Sentiment and Risks - The oil market is reacting to the fluctuating nature of U.S.-Iran talks, with analysts noting the fragile state of diplomatic relations [6] - Citi analysts highlight that while immediate risk premiums have eased, concerns about upside risks remain due to U.S. actions and uncertainties regarding Indian purchases of Russian oil [8] - Market positioning indicates ongoing supply concerns, with near-term oil trading at a premium and traders paying for protection against higher prices [9]