New York: Oil prices declined on Monday as investors assessed the potential impact of US-brokered Russia-Ukraine peace talks, while concerns about the global economy persisted due to upcoming US reciprocal tariffs.
According to Anadolu Agency, the international benchmark Brent crude fell by approximately 0.36% to trade at $71.46 per barrel at 11.40 a.m. local time (0840 GMT), down from the previous session's close of $71.72. Similarly, the US benchmark, West Texas Intermediate (WTI), dropped by about 0.37%, settling at $68 per barrel, compared to its prior session close of $68.25.
Investors are keeping a close watch on US-brokered Russia-Ukraine peace talks, which, if successful, could lead to an increase in Russian oil supply. A US delegation is engaged in meetings with Russian and Ukrainian officials, aiming for a Black Sea ceasefire.
Ukraine's Defense Minister Rustem Umerov described talks with a US delegation in Saudi Arabia as "productive" on Sunday via X, emphasizing discussions on crucial issues, including energy. He reiterated Ukrainian President Volodymyr Zelenskyy's pursuit of a "just and lasting peace" for Ukraine. This meeting comes ahead of US-Russia talks on a potential ceasefire, although ongoing strikes cast doubt on progress.
Meanwhile, the US is preparing to implement reciprocal tariffs on April 2, aiming to align tariffs with those imposed by other countries on its goods. These impending tariffs have created uncertainty about the global economy, with experts warning of a potential slowdown in economic growth that could reduce oil demand.
US President Donald Trump hinted at "flexibility" regarding the tariffs, indicating on Friday that adjustments might be possible, despite initially opposing exemptions. "People are coming to me and asking if they can have exceptions," Trump told reporters in the Oval Office.
In addition, recent US sanctions on Iran continue to raise expectations of tighter supply in global oil markets. Last week, the US Treasury Department imposed sanctions on 19 entities and vessels linked to Iran's oil exports, while the US State Department sanctioned a Chinese oil terminal for purchasing and storing Iranian crude from a sanctioned vessel.
This move has affected the physical market, with spot and near-term futures rising for oil from the Middle East, according to Daniel Hynes, a senior commodity strategist at the Australia and New Zealand Banking Group. "Asian traders are said to be holding back from purchasing Iranian crude," Hynes noted in an emailed statement.
Furthermore, the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, released a new schedule for seven member countries to make further production cuts to compensate for previous overproductions. This move is anticipated to offset the impact of the group's planned monthly production increases set to commence in April.