Oil rises to near seven-month highs on US-Iran tensions

By Trixie Yap and Anushree Mukherjee

Feb 24 (Reuters) - Oil prices rose on Tuesday, nearing seven-month highs, with traders assessing risks to supply from any military escalation as another round of U.S.-Iran nuclear talks loomed.

Brent crude futures LCOc1 rose 48 cents, or 0.7%, to $71.97 a barrel by 0658 GMT, while U.S. crude futures CLc1 climbed 45 cents, or 0.7%, to $66.76 a barrel.

Brent is trading at its highest since July 31, while WTI is at its firmest since August 1.

"At this stage, geopolitics is clearly doing most of the heavy lifting for oil prices, with the current firmness largely driven by anticipation rather than actual supply loss," said Phillip Nova senior market analyst Priyanka Sachdeva.

"The risk of possible military escalation in the Middle East is gaining traction, and thus, traders appear to hedge against worst-case scenarios."

Iran and the U.S. will hold a third round of nuclear talks on Thursday in Geneva, Oman's Foreign Minister Badr Albusaidi said on Sunday.

The United States wants Iran to give up its nuclear programme, but Iran has adamantly refused, and denied it is trying to develop an atomic weapon.

The State Department is pulling out non-essential government personnel and their families from the U.S. embassy in Beirut, a senior State Department official said on Monday, amid growing concerns about the risk of a military conflict with Iran.

U.S. President Donald Trump said in a social media post on Monday that it will be a "very bad day" for Iran if it does not make a deal.

"In the near-term, geopolitical factors related to the U.S.-Iran conflict are likely to be the primary driver for oil prices," said OANDA senior market analyst Kelvin Wong.

"For now, WTI crude oil is evolving in a short-term bullish dynamic, holding above its 20-day moving average, acting as a key short-term support at $63.90/barrel."

On the trade policy front, Trump on Monday warned countries against backing away from recently negotiated trade deals with the U.S. after the Supreme Court struck down his emergency tariffs, saying that he would hit them with much higher duties under different trade laws.

"U.S. President Donald Trump created uncertainty for global growth and fuel demand with a new round of tariff hikes," UOB Bank analysts said in a client note.

Trump said on Saturday he would raise a temporary tariff to 15% from 10% on U.S. imports from all countries, the maximum level allowed under the law.