Baghdad, Iraq- Oil prices fell on Thursday as the possibility of a peace agreement between Ukraine and Russia raised expectations that sanctions disrupting global supply flows could be lifted. Additionally, U.S. President Donald Trump’s plan to introduce reciprocal tariffs sparked concerns over inflation, further pressuring the market.
By 01:41 GMT, Brent crude futures had declined by 55 cents, or 0.73%, to $74.63 per barrel, while U.S. West Texas Intermediate (WTI) crude dropped 52 cents, or 0.73%, to $70.85 per barrel.
The decline followed a more than 2% drop in oil prices on Wednesday after Trump announced that both Russian President Vladimir Putin and Ukrainian President Volodymyr Zelenskiy had expressed interest in peace during separate phone calls. Trump subsequently directed U.S. officials to initiate discussions aimed at ending the war in Ukraine.
Russia, the world’s third-largest oil producer, has been subject to Western sanctions on its crude exports since its invasion of Ukraine nearly three years ago, contributing to elevated oil prices. Analysts noted that oil prices retreated as news of potential peace negotiations created optimism that supply disruptions might ease.
Tightening supply conditions had previously supported oil prices, with U.S. sanctions on Russian oil companies and shipping vessels playing a role in limiting exports.
Trump’s renewed threats of tariffs against U.S. trade partners also added pressure to oil prices, as concerns grew that such measures could slow global economic growth and reduce energy demand. Trump stated he would impose reciprocal tariffs on countries that levy duties on U.S. imports, fueling fears of an escalating trade war and rising inflation.
Adding to market concerns, U.S. crude oil inventories saw a larger-than-expected increase, further weighing on prices. Data from the Energy Information Administration (EIA) showed that U.S. crude stocks rose by 4.1 million barrels to 427.9 million barrels in the week ending February 7, surpassing analysts’ expectations of a 3 million-barrel increase.
Market observers continue to monitor geopolitical developments and trade policies, as these factors are expected to shape the oil market’s trajectory in the coming weeks.
