Oil prices declined on Wednesday following Russia’s agreement to temporarily halt attacks on Ukrainian energy infrastructure, a move proposed by U.S. President Donald Trump. The potential de-escalation raised expectations of increased Russian oil supply in global markets.
By 0106 GMT, Brent crude futures dropped $0.12 (0.2%) to $70.44 per barrel, while West Texas Intermediate (WTI) fell $0.15 (0.2%) to $66.75 per barrel.
Key Market Developments:
- Russia’s Energy Truce: President Vladimir Putin agreed to halt attacks on Ukrainian energy facilities, though he stopped short of endorsing a full 30-day ceasefire.
- Possible Supply Increase: Analysts suggest that a partial ceasefire could lead to eased sanctions on Russia, boosting its oil exports and exerting downward pressure on prices.
- U.S. Tariffs and Recession Fears: New U.S. tariffs on Canada, Mexico, and China have heightened concerns about a global economic slowdown, potentially reducing crude demand.
Geopolitical Risks Limiting Oil Price Decline:
- Middle East Tensions:
- Trump reaffirmed U.S. military action against Yemen’s Houthis, holding Iran responsible for Red Sea shipping disruptions.
- Israeli airstrikes in Gaza killed 200 people, ending a week-long ceasefire and increasing supply risks from the region.
U.S. Crude Inventory Data:
- Crude stocks rose by 4.59 million barrels for the week ending March 14, according to American Petroleum Institute (API) data.
- Gasoline inventories fell 1.71 million barrels, while distillate stocks declined 2.15 million barrels.
Would you like an analysis of how this impacts Pakistan’s oil import strategy or fuel prices?
