Oil prices fell on Tuesday on uncertainty in U.S.-Iran negotiations and Russia-Ukraine peace talks, while new government data provided a cautious outlook for the economy of China, a major crude importer.

Brent crude futures fell 42 cents, or 0.6%, to $65.12 a barrel by 11:02 a.m. EDT (1502 GMT), while U.S. West Texas Intermediate (WTI) crude fell 26 cents, or 0.4%, to $62.43.

Iran's Supreme Leader Ayatollah Ali Khamenei said U.S. demands that Tehran halt uranium enrichment were "excessive and outrageous," casting doubt on whether talks on a new nuclear deal would succeed.

Iran is the third-largest crude producer in the Organization of the Petroleum Exporting Countries (OPEC) group in 2024 behind Saudi Arabia and Iraq, according to U.S. federal energy data.

The deal between Iran and the US would allow Iran to increase oil exports by 300,000 to 400,000 barrels per day if sanctions are eased, said StoneX analyst Alex Hodes.

The European Union and the UK announced new sanctions on Russia without waiting for the US to join them, a day after US President Donald Trump spoke to Russian President Vladimir Putin without getting a promise for a ceasefire in Ukraine.

Ukraine wants the Group of Seven (G7) major economies to reduce their price cap on Russian seaborne oil to $30 a barrel. The current G7 cap, imposed over Russia's war in Ukraine, is $60.

"However, an immediate resolution of the Russia/Ukraine war seems unlikely. So while that could lead to more Russian oil coming onto the market, it would come at a time and is uncertain as Russia is still bound by its OPEC+ obligations," said Bjarne Schieldrop, chief commodity strategist at SEB, a Nordic bank.

A deal to end the war between Russia and Ukraine could allow Moscow to export more oil to the rest of the world. Russia is a member of the OPEC+ group of nations, which includes OPEC and other producers.

Russia was the world's second-largest crude oil producer after the U.S. in 2024, according to U.S. federal energy data.(alg)

Source: Reuters