As U.S. President Donald Trump’s tariff deadline looms and Ukrainian President Volodymyr Zelenskyy storms out of talks with the former U.S. leader, the heightened uncertainty in Ukraine has made global oil prices tumble by around 2%.
On Monday afternoon, West Texas Intermediate (WTI) crude futures plunged 2.24% to $68.21 per barrel on the New York Mercantile Exchange. Meanwhile, North Sea Brent crude futures also dropped 1.84%, trading at $71.46 per barrel.
Trump appears set to move forward with new tariffs, raising inflation concerns. A spike in inflation could put the brakes on the Federal Reserve’s interest rate cuts, potentially slowing economic growth and dampening energy demand.
Zelenskyy’s abrupt exit from the meeting with Trump signals that U.S.-Ukraine relations may remain strained for the foreseeable future. Reuters reports that Trump, who has historically been friendly towards Russia, might accelerate the lifting of comprehensive U.S. sanctions against Moscow. This starkly contrasts with the Biden administration, which ramped up sanctions against Russia in its final months.
If Russian sanctions are eased, the global oil supply could rise, exerting further downward pressure on prices. Oil markets react to these geopolitical and economic risks, with prices slipping around 2% today.