Oil prices fell on Thursday as signs of potential peace talks between Ukraine and Russia raised expectations that sanctions affecting Russian crude exports could be lifted, easing global supply constraints.
Additionally, U.S. President Donald Trump’s proposal to impose reciprocal tariffs on trade partners heightened inflation concerns, further weighing on the market.
By 3:15 pm AEDT (4:15 am GMT) Brent crude dropped $0.74 or 1% to $74.44 per barrel, while West Texas Intermediate (WTI) crude for April slipped $0.70 1% to $70.54 per barrel.
The declines followed a more than 2% drop on Wednesday after Trump revealed that both Russian President Vladimir Putin and Ukrainian President Volodymyr Zelenskiy had expressed interest in peace during separate calls with him.
Trump subsequently directed U.S. officials to initiate talks aimed at ending the war in Ukraine, raising the possibility of lifting sanctions on Russian oil.
Meanwhile, Trump’s threat to impose new reciprocal tariffs on countries that tax U.S. imports added to market concerns. The move raises the risk of a wider global trade war, which could dampen economic growth and curb oil demand.
Market sentiment was further pressured by a larger-than-expected buildup in U.S. crude inventories. Data from the Energy Information Administration (EIA) on Wednesday (Thursday AEDT) showed that U.S. crude stocks rose by 4.1 million barrels to 427.9 million barrels in the week ending 7 February, surpassing expectations of a 3 million-barrel increase.
