Oil prices fell more than 1% on Thursday due to ongoing pressure from potential peace talks between Russia and Ukraine, along with rising crude inventories in the United States.
Brent futures dropped $1.04, or 1.4%, to $74.14 per barrel by 1303 GMT, while U.S. West Texas Intermediate (WTI) crude declined by $1.04, or 1.5%, to $70.33. Both Brent and WTI lost more than 2% on Wednesday following reports that U.S. President Donald Trump said Russian President Vladimir Putin and Ukrainian President Volodymyr Zelenskiy expressed interest in peace during separate phone calls with him.
Trump also instructed U.S. officials to begin discussions on ending the war in Ukraine.
The drop in oil prices is attributed to a shift in market sentiment from supply concerns to expectations of sufficient supply. Market participants are also anticipating potential increases in Russian energy exports.
Russian crude production rose slightly last month, and the International Energy Agency (IEA) has suggested that Russian oil exports could be sustained if workarounds to the latest U.S. sanctions are found.
The peace talk news, coupled with rising U.S. oil inventories, offset the effects of higher U.S. inflation numbers, which could influence the Federal Reserve’s cautious approach to interest rate cuts in 2025.
Sanctions on Russian oil exports, imposed after Russia’s invasion of Ukraine nearly three years ago, have supported higher prices, but recent optimism over peace talks has led to expectations that risks to crude oil supplies could ease. U.S. crude inventories increased more than expected last week, according to data from the Energy Information Administration (EIA), further weighing on the market.
Additionally, U.S. President Donald Trump’s plans to announce reciprocal tariffs on Thursday added further pressure on oil prices.
