Oil prices stage recovery on new Iran sanctions, equities rally

Oil prices rose more than $1 per barrel on Tuesday as new U.S. sanctions against Iran and rising equity markets helped spark a recovery rally from the prior session's steep selloff.

Brent crude futures rose $1.74, or 2.6%, to $68 per barrel by 12:16 p.m. ET (1616 GMT). The U.S. West Texas Intermediate crude contract for May , which expires on Tuesday, was up $1.96, or 3.1%, to $65.04.

The United States on Tuesday issued fresh sanctions targeting an Iranian liquefied petroleum gas and crude oil shipping magnate and his corporate network.

Although talks between Washington and Tehran over the latter's nuclear program made progress over the past weekend, failure to reach a deal could weigh heavily on Iran's oil exports amid tightening U.S. sanctions, said John Kilduff, partner at New York-based Again Capital.

"Either some nuclear deal is agreed or the U.S. tries to drive Iran's oil flows to zero, and its increasingly looking like a zero-flow scenario," Kilduff said.

A surge in equity markets, indicative of higher risk appetite from investors, also aided oil prices, Mizuho analyst Robert Yawger said.