Oil prices dropped on Thursday amid expectations that a potential peace deal between Ukraine and Russia could lead to the lifting of sanctions that have disrupted global supply flows. Additionally, US President Donald Trump’s plan to introduce reciprocal tariffs raised concerns over inflation.
By 0141 GMT, Brent crude futures fell 55 cents, or 0.73%, to $74.63 per barrel, while US West Texas Intermediate (WTI) crude declined 52 cents, or 0.73%, to $70.85 per barrel.
On Wednesday, both Brent and WTI slid more than 2% after Trump revealed that Russian President Vladimir Putin and Ukrainian President Volodymyr Zelenskiy had expressed interest in peace during separate phone calls with him. Trump subsequently directed top US officials to initiate negotiations to end the conflict.
Russia, the world’s third-largest oil producer, has faced sanctions on its crude exports since its invasion of Ukraine nearly three years ago, a factor that has supported higher oil prices.
Analysts at ANZ noted that oil prices eased following news of possible peace talks, citing optimism that crude supply risks would diminish. They highlighted that US and EU sanctions had previously restricted Russian oil output, contributing to price increases.
Meanwhile, Trump’s proposal for new tariffs against US trade partners pressured oil prices further due to concerns over reduced economic growth and lower demand. He announced plans to impose reciprocal tariffs on countries that levy duties on US imports, raising fears of a global trade war and accelerating inflation risks.
A larger-than-expected build in US crude inventories also weighed on the market. Data from the Energy Information Administration (EIA) showed that US crude stocks rose by 4.1 million barrels to 427.9 million barrels in the week ending February 7, surpassing analysts’ forecasts of a 3 million-barrel increase.
