- Oil prices fell after Russia agreed to temporarily halt attacks on Ukrainian energy infrastructure, raising the possibility of increased Russian oil supply.
- Market concerns include U.S. tariffs raising recession fears, Middle East tensions affecting supply risks, and U.S. crude stock data showing mixed trends.
Oil prices dropped on Wednesday, March 19, after Russia accepted U.S. President Donald Trump’s proposal to halt attacks on energy infrastructure in Ukraine. This temporary agreement could increase Russia’s oil supply in global markets.
Brent crude futures lost 23 cents, or 0.3%, reaching $70.33 per barrel by 0730 GMT. U.S. West Texas Intermediate (WTI) crude fell 25 cents, or 0.4%, to $66.65 per barrel.
On Tuesday, March 18, Russian President Vladimir Putin agreed to stop targeting Ukrainian energy sites. However, he did not support the complete 30-day ceasefire Trump wanted.
“The agreement is a step towards resolution. Stopping attacks on Ukrainian energy sites reduces oil supply disruptions and keeps prices under pressure,” said Yeap Jun Rong, market strategist at IG.
Russia remains one of the world’s top oil producers. However, its output has decreased since the war began, leading to sanctions on Russian energy. A possible ceasefire could ease these sanctions, analysts suggest, raising the oil supply and lowering prices.
Meanwhile, U.S. tariffs on Canada, Mexico, and China have increased recession fears, lowering demand for crude oil.
Goldman Sachs analysts noted that oil markets focus on price declines despite tensions in the Middle East. In a note on Wednesday, March 19, the analysts wrote that “Tariff escalation and high spare capacity create downside risks to our forecast. “
A highly anticipated phone call between Trump and Putin resulted in a limited agreement for Russia to halt strikes. Israeli airstrikes in Gaza killed at least 200 people, Palestinian health officials reported. This attack ended a week-long ceasefire and raised concerns about oil supply risks in the region.
U.S. crude oil stock data showed mixed results. Crude stocks rose while fuel inventories declined. Market sources cited American Petroleum Institute data, stating crude stocks increased by 4.59 million barrels for the week ending March 14.
Gasoline inventories fell by 1.71 million barrels, and distillate stocks dropped by 2.15 million barrels. Official government data will be released on Wednesday, March 19.