Oil Prices Decline Amid Russia-Ukraine Peace Hopes and Trade War Concerns
Oil prices dropped for a fourth consecutive session on Monday as optimism over a potential Russia-Ukraine peace deal raised expectations of eased sanctions on Moscow’s oil exports. Concerns over global trade tensions also contributed to the decline, with fears that tariff wars could slow economic growth and weaken energy demand.
Brent crude futures fell $0.20 (0.2%) to $74.59 per barrel by 0112 GMT, marking a 3.1% decline over the past four sessions. Similarly, U.S. West Texas Intermediate (WTI) crude slipped $0.23 (0.3%) to $70.51 per barrel, having lost 3.8% over the past four sessions. Earlier on Monday, WTI hit $70.12, its lowest since December 30.
The price slump follows statements from U.S. President Donald Trump, who expressed confidence in an upcoming meeting with Russian President Vladimir Putin to discuss ending the war in Ukraine. Meanwhile, U.S. and Russian officials are set to engage in preliminary talks in Saudi Arabia in the coming days.
Market analyst Hiroyuki Kikukawa attributed the decline in oil prices to hopes for a ceasefire and the possibility of sanction relief on Russian oil. Additionally, fears of an economic slowdown due to escalating trade tensions—following Trump’s push for reciprocal tariffs on foreign goods—have also dampened market sentiment.
Impact on Oil Supply and U.S. Energy Sector
- Lifting of Russian oil sanctions in the event of a peace deal could increase global energy supplies, potentially stabilizing the market.
- The U.S. and European sanctions on Russian oil have significantly impacted global supply chains, disrupting seaborne oil shipments.
- U.S. energy firms have responded by adding oil and natural gas rigs for the third consecutive week, signaling potential output growth. The oil and gas rig count rose by two to 588 in the week ending February 14, according to Baker Hughes.
As uncertainty over geopolitical developments and global trade policies continues, analysts predict WTI crude to trade within the $66-$76 range in the near future.
