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Oil prices continue to decline amid growing tensions between US, Ukraine, Reuters reports

• 2 min read
Oil prices continue to decline amid growing tensions between US, Ukraine, Reuters reports
Oil storage tanks sit illuminated by electric light at the "TANECO" refining and petrochemical plant, operated by Tatneft OAO, in Nizhnekamsk, Russia, on July 30, 2015. Illustrative purposes. (Andrey Rudakov/Bloomberg via Getty Images)

Oil prices have continued to drop after U.S. President Donald Trump reportedly suspended military aid to Ukraine, Reuters reported on March 4.

The news from the U.S. comes after a spat between Trump and President Volodymyr Zelensky in the Oval Office last week. Neither Washington nor Kyiv have officially confirmed the freeze.

Brent crude oil futures fell 54 cents, or 0.75%, to $71.08 per barrel. In the meantime, futures for U.S. West Texas Intermediate crude oil decreased by 36 cents, or 0.53%, to $68.01 per barrel, according to the news agency.

The market perceived the distancing of the U.S. and Ukraine as a signal of a possible easing of the war, subsequently leading to the loosening of sanctions against Russia and the return of additional volumes of Russian oil for purchase, Reuters reported.

Yet Goldman Sachs analysts noted that Russian oil exports are now more limited by the Organization of the Petroleum Exporting Countries (OPEC) quotas than by sanctions, so even if sanctions are eased, a significant increase in supplies is not guaranteed.

OPEC's decision to extend the planned increase in production by 138,000 barrels per day, the first increase since 2022, also puts pressure on prices.

A day earlier, oil prices fell by about 2%, hitting a 12-week low, amid news about Ukraine and concerns that new U.S. tariffs will hurt global economic growth, according to Reuters.

Trump's 25% tariffs on imports from Canada and Mexico will come into effect on March 4, with energy products from Canada subject to a 10% duty, while tariffs on Chinese goods will rise from 10% to 20%.

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Kateryna Hodunova

News Editor

Kateryna Hodunova is a News Editor at the Kyiv Independent. She previously worked as a sports journalist in several Ukrainian outlets and was the deputy chief editor at Suspilne Sport. Kateryna covered the 2022 Olympics in Beijing and was included in the Special Mentions list at the AIPS Sport Media Awards. She holds a bachelor's degree in political journalism from Taras Shevchenko University and a master's degree in political science from the National University of Kyiv-Mohyla Academy.

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"This is the single largest expansion of our sanctions list since Russia started its war," chief EU diplomat Kaja Kallas said, adding that more than half of the roughly 1600 listings "are connected to the production chain for ballistic missiles."

Inflicting heavy personnel losses has become a stated strategic objective of Ukraine. In January, then-Defense Minister Mykhailo Fedorov said Ukraine aimed to "kill 50,000 Russians per month," arguing that losses on that scale could undermine Moscow's ability to sustain the war.

Among those killed were a 16-year-old boy, as well as a 19-year-old woman, and a 51-year-old woman, authorities said, in a strike that landed near a grocery store as well as several residential buildings.

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