Wednesday12 February 2025
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Oil prices fell following Trump's renewed call for OPEC to lower their prices.

Oil prices fell after U.S. President Donald Trump urged OPEC to lower prices. This statement came following the announcement of extensive measures to boost oil and gas production in the U.S. during the first week of his administration.
Нефть подешевела после нового призыва Трампа к ОПЕК снизить цены.

Oil prices have declined after U.S. President Donald Trump urged OPEC to lower prices. This statement came after the announcement of extensive measures to increase oil and gas production in the U.S. during the first week of his presidency.

This was reported by RBK-Ukraine referencing Reuters.

Brent crude futures dropped by 0.7% to $78.0 per barrel. The price of U.S. West Texas Intermediate (WTI) crude oil fell to $74.15 per barrel, also down by 0.7%.

Trump's Statements

On January 24, Trump reiterated his call for the Organization of the Petroleum Exporting Countries to lower oil prices to undermine Russia's finances and help end the war against Ukraine.

"One way to stop this quickly is for OPEC to stop making so much money and reduce oil prices... This war will end immediately," Trump stated.

Trump also threatened to impose taxes, tariffs, and sanctions on Russia "and other participant countries" if an agreement to cease the war against Ukraine is not reached soon.

Vladimir Putin mentioned that he and Trump should meet to discuss the war and energy prices.

John Driscoll from the Singapore consulting firm JTD Energy noted that oil markets are likely skewed slightly downward due to Trump's policies aimed at increasing production in the U.S., as he seeks to secure overseas markets for American crude oil.

"He will want to reclaim some of OPEC's market share, so in that sense, he is somewhat of a competitor," Driscoll said.

However, OPEC and its allies, including Russia, have not yet responded to Trump's call, while OPEC+ delegates pointed to an existing plan to start increasing oil production in April.

Market Situation

Last week, Brent and WTI prices fell for the first time in five weeks as concerns about sanctions against Russia, which could lead to supply cuts, eased.

Goldman Sachs analysts stated that they do not expect a significant impact on Russian production, as higher freight rates have encouraged an increase in the supply of non-sanctioned vessels for transporting Russian oil, while the growing discount on the affected Russian ESPO grade attracts price-sensitive buyers to continue purchasing oil.

"Since the ultimate goal of sanctions is to reduce revenues from Russian oil sales, we expect Western policymakers to prioritize maximizing discounts on Russian barrels rather than cutting Russian volumes," the analysts noted.

Nevertheless, JP Morgan analysts believe that some risk premium is justified, considering that nearly 20% of the global Aframax tanker fleet is currently under sanctions.

"The application of sanctions to the Russian energy sector as leverage in future negotiations could have any outcome, indicating that a zero risk premium is impractical," they added in their note.

Furthermore, the U.S. quickly abandoned plans to impose sanctions and tariffs on Colombia after the South American country agreed to accept deported migrants from the United States, according to a statement from the White House released late Sunday.

Sanctions could have disrupted oil supplies, as Colombia sent about 41% of its maritime crude oil exports to the U.S. last year, according to data from analytics firm Kpler.

It should be noted that since the beginning of the war, Ukraine has been importing all of its gasoline needs, making global oil prices a key factor influencing fuel prices. In January, gasoline prices at gas stations in Ukraine rose as oil prices increased.