On Tuesday, international oil prices fell by about 1% as the market focused on the content of the meeting between U.S. President Trump and Russian President Putin. They discussed ending the Ukraine war and agreed to stop attacking each other's energy infrastructure within 30 days. This development sparked market speculation that if sanctions are eased, Russian fuel exports might increase, putting downward pressure on oil prices.
Brent crude futures fell 0.7%, closing at $70.56 per barrel, while U.S. crude futures dropped 1.0%, settling at $66.90. Analysts believe that even if the U.S. and Russia reach a ceasefire agreement on the Ukraine issue, a substantial increase in Russian energy supply will still take time. According to the U.S. Energy Information Administration (EIA), Russia's crude oil production in 2024 is about 9.2 million barrels per day, still below 9.8 million barrels per day in 2022 and a historical high of 10.6 million barrels per day in 2016.
Besides the uncertainty of Russian supply, U.S. trade policy has also affected market sentiment. The Trump administration's tariff policies have raised concerns over global economic growth. The Organization for Economic Cooperation and Development (OECD) warned that the new tariffs imposed by the U.S. on several countries might weaken economic growth in the North American region and suppress global energy demand. Bob Yawger, Mizuho Energy Futures director, pointed out in a report that concerns about economic recession have intensified, with the tariff measures set to take effect on April 2 seen as a major economic threat.
Despite market pressure, crude prices rose at one point during the session. Earlier, tension in the Middle East that might affect oil supply and market anticipation of Germany unveiling an economic stimulus plan to boost fuel demand drove oil prices to a two-week high.
The American Petroleum Institute (API) will release the latest oil inventory data later, and the EIA will publish official statistics on Wednesday. Analysts expect U.S. crude inventory to increase by about 900,000 barrels for the week ending March 14, and the market will closely monitor the impact of this data on oil prices.
