West Texas Intermediate futures declined 2.2% in New York trading on Tuesday. French President Emmanuel Macron said that he received assurances from his Russian counterpart Vladimir Putin that he would not escalate the situation further with Ukraine, while Moscow cast doubt on his comments. Additionally, Iran’s nuclear talks appeared to gain momentum. Oil, natural gas and metals have surged in recent weeks driven by fears that Russian forces may invade Ukraine, which could spark retaliatory sanctions by the U.S. Russia has repeatedly denied any such plans.

“A lot of the geopolitical risk is priced in to crude currently so any progress, even small, could take a bit of that premium out of the price,” said Rebecca Babin, senior energy trader at CIBC Private Wealth Management. “It will not induce a massive selloff unless something concrete happens, but if things are not getting worse crude starts to fade off the highs”

The possibility of more Iranian oil comes as global supply has increasingly been unable to keep up with surging demand from economies emerging from the pandemic. OPEC+ is stuggling to meet its pledged output increases, in part due to outages in Libya, while traders are looking to see how much the U.S. shale patch will lift output this year. With prices hanging around their highest since 2014, some believe oil executives are showing signs of abandoning pledges to hold the line on drill budgets. U.S. shale explorers are poised to boost spending by almost 40% this year, based on comments and plans revealed during recent earnings presentations, Citigroup Inc. analyst Scott Gruber wrote in a note to investors.

Additionally, the Energy Information Administration sees U.S. oil production growing more than the government previously expected as the price rally drives producers to boost drilling. Supply will average 12.6 million barrels a day in 2023, an increase from the EIA’s  previous estimate of 12.41 million, according to the data. Despite the easing seen in the futures rally, the physical market has rallied sharply in recent days, with benchmark Dated Brent assessed by S&P Global Platts at more than $98 a barrel on Monday, the strongest since 2014. It’s the latest in a string of bullish signs in the key North Sea market.

Another possible impact on physical markets could come from lingering disruptions at a number of U.S. oil refineries after a bout of cold weather. Those affected include the nation’s second-largest, potentially disrupting both crude intake and oil-product deliveries. After markets closed, the industry-funded American Petroleum Institute reported that U.S. crude supplies fell about 2 million barrels last week, according to people familiar with the data. The data also showed stockpiles in Cushing, Oklahoma, the biggest storage hub in the U.S., declined by about 2.5 million barrels. The U.S. government will release its weekly inventory tally on Wednesday.