Oil Prices Decline on Russia-Ukraine Peace Talks and Tariff Concerns
Oil prices fell for a fourth consecutive day on Monday as hopes for a Russia-Ukraine peace deal raised expectations of sanction relief, potentially easing disruptions in global supply flows. Additionally, concerns over escalating global trade tensions and potential tariff wars weighed on market sentiment, raising fears of slower economic growth and weaker energy demand.
Brent crude futures declined $0.20 (0.2%) to $74.59 per barrel by 01:12 GMT, extending its 3.1% loss over the past four sessions. The price slump follows confirmation that U.S. President Donald Trump and his administration have initiated talks with Russia to end the war in Ukraine.
Meanwhile, U.S. West Texas Intermediate (WTI) crude dropped $0.23 (0.3%) to $70.51 per barrel, having declined 3.8% over the past four sessions. Earlier in the day, WTI hit $70.12, its lowest level since December 30.
Peace Talks and Tariff Uncertainty Weigh on Oil Markets
On Sunday, President Trump stated that he expects to meet “very soon” with Russian President Vladimir Putin to discuss ending the conflict in Ukraine. The U.S. and Russia are set to begin preliminary negotiations in Saudi Arabia in the coming days.
U.S. Secretary of State Marco Rubio reaffirmed that Ukraine and European allies would be involved in any serious peace negotiations. He also noted that upcoming talks with Russia would serve as a key test of Putin’s commitment to ending the war.
“Markets are down on the prospect of a Russia-Ukraine ceasefire and potential sanctions relief on Moscow,” said Hiroyuki Kikukawa, president of NS Trading, a unit of Nissan Securities.
Additionally, concerns over slowing global economic growth due to escalating trade tensions are impacting sentiment. “Fears of an economic slowdown from tariff wars, driven by Trump’s trade policies, are also weighing on prices,” Kikukawa added. He expects WTI crude to trade between $66-$76 per barrel in the near term, as further price declines could limit U.S. oil production.
Impact of Sanctions and Trade Policy
Sanctions imposed by the U.S. and European Union on Russian oil exports have disrupted global seaborne supply flows. However, a potential lifting of sanctions following a peace agreement could increase global energy supplies, exerting further downward pressure on oil prices.
Meanwhile, fears of a global trade war intensified after Trump directed U.S. trade and economic officials to review reciprocal tariffs against nations imposing tariffs on American goods, with recommendations due by April 1.
U.S. Oil Production and Market Outlook
Despite falling prices, U.S. energy firms increased their oil and natural gas rig count for a third consecutive week—the first such streak since December 2023—signaling potential growth in future output.
According to Baker Hughes, the total rig count—a leading indicator of future production—rose by two to 588 in the week ending February 14.
Prices and figures quoted were correct at the time of writing.
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