Islamabad, Jan 27: Oil prices edged lower on Monday following remarks by former U.S. President Donald Trump, urging OPEC to lower oil prices as part of efforts to counter Russia’s economy and end the Ukraine war. Brent crude futures fell 0.68% to $77.97 a barrel, while U.S. West Texas Intermediate (WTI) crude declined 0.67% to $74.16 a barrel.
Trump suggested that reducing OPEC revenues could pressure Russia to negotiate peace in Ukraine. “If OPEC drops oil prices, the war will stop immediately,” he stated, emphasizing potential tariffs and sanctions on Russia and its allies if no progress is made. Meanwhile, Russian President Vladimir Putin expressed readiness to engage in direct talks with Trump on the matter, underscoring the strategic importance of energy in the geopolitical landscape.
Market analyst John Driscoll highlighted the resulting volatility, attributing it partly to Trump’s policies aimed at expanding U.S. oil output to compete with OPEC. However, OPEC+ has yet to respond, maintaining its plan to gradually increase production from April. 
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Goldman Sachs analysts foresee minimal disruptions to Russian oil output due to the adaptability of global shipping and competitive pricing of discounted Russian oil. On the other hand, JP Morgan analysts caution that sanctions on Russia, impacting around 20% of the Aframax fleet, may justify some risk premium in the market.
Adding to the mix, the U.S. reversed planned sanctions on Colombia after securing an agreement on migrant deportations, averting potential disruptions in oil supply from a country that sends 41% of its crude exports to the U.S.
The oil market remains sensitive to geopolitical developments, with competing interests shaping supply, demand, and pricing dynamics globally.
