Prices for oil are up by 2% driven by political pressures, penalties on Russia and Iran, fires in Canada and less U.S. crude being stored.

Prices for oil climbed almost 2% on Tuesday, hitting a level unseen for two weeks because of worsening geopolitics and worries about future supply. Brent crude closed at $65.63 after adding $1 and U.S. West Texas Intermediate (WTI) climbed by 89 cents to finish at $63.41.

Analysts connect the sudden price rise to battles in Russia and Ukraine and halted nuclear talks between the U.S. and Iran. Since both countries are major members of OPEC+, they will stay affected by sanctions that reduce the market’s oil availability.

Russia, which was the second most productive in oil in 2024, remains diplomatically isolated due to the conflict over Ukraine. At the same time, Iran, a major producer of OPEC oil, is likely to refuse a U.S. offer to revoke some sanctions under the nuclear deal agreement.

Wildfires in Alberta have shut down over 344,000 oil sands production barrels daily which represents around 7% of Canada’s national oil output and adds to the international issues.

Both rising trade conflicts and increasing tariffs reduce confidence in the U.S. economy and therefore likely interest rates, despite the European Central Bank considering possible cuts. Less crude oil in U.S. storage, by about 1 million barrels last week, proves that consumption is high.

Since the oil markets are still highly volatile, energy officials are closely following supply reports and geopolitical changes to see where global crude is heading.