Oil prices declined on Tuesday as U.S. President Donald Trump’s foreign policy moves, including potential sanctions relief for Russia, tariffs on key trading partners, and renewed pressure on Iran, influenced market sentiment.
Brent crude futures dropped 57 cents, or 0.8%, to $74.21 a barrel by 1301 GMT, while U.S. West Texas Intermediate crude fell 53 cents, also 0.8%, to $70.16 a barrel. Both benchmarks had gained in Monday’s session after a $2 drop last Friday.
Trump’s ongoing diplomatic efforts with Moscow have raised speculation about a possible easing of Russian sanctions, which could lead to increased crude supply. Meanwhile, his administration reaffirmed that tariffs on Canadian and Mexican imports, set to take effect on March 4, remain on schedule, despite diplomatic efforts from both countries.
The U.S. also tightened sanctions on Iran on Monday, marking the second wave of restrictions this month as part of a broader strategy to curb Tehran’s oil exports. Iran, the third-largest producer in the Organization of the Petroleum Exporting Countries (OPEC), pumped 3.2 million barrels per day in January, according to a Reuters survey.
On the third anniversary of Russia’s invasion of Ukraine, the European Union sanctioned 73 ships linked to sanctions evasion, while the United Kingdom blacklisted 40 vessels involved in transporting Russian oil.
A lack of fresh economic data from China also weighed on prices, as investors awaited new stimulus policies and the country’s 2025 growth targets, expected to be announced in mid-March.
Western fuel demand provided some support to the market, with refining margins strengthening due to increased heating oil demand amid a cold snap in the U.S. Gulf Coast and Northwest Europe. Margins for a typical refinery in Singapore processing Dubai crude averaged $3.50 a barrel in February, up from $2.30 a barrel last month, according to LSEG pricing data.
