Oil prices fall driven by recession concerns, Trump’s tariff policies, and reduced Middle East risk following Gaza ceasefire.
Oil prices decreased ahead of the inauguration of Donald Trump, who will take office as the 47th US President, set for Monday, with a ceasefire and prisoner exchange agreement reached between Israel and Hamas, reached on Jan. 15, further dampening market sentiment.
The international benchmark Brent crude fell by 0.3%, trading at $79.60 per barrel at 10.56 a.m. local time (0756 GMT), up from $79.87 at the close of the previous session.
The US benchmark West Texas Intermediate (WTI) decreased by 0.2%, reaching $77.06 per barrel, compared to its prior session close of $77.24.
Lingering uncertainty around Trump’s trade policies, particularly regarding tariffs, continues to weigh on European economic prospects, stoking fears of a recession in the region.
These concerns have already started to dent oil demand in the world’s largest consumer, contributing to price declines.
Additionally, Trump’s pledges to impose a 25% tariff on all products from Mexico and Canada, alongside a 10% tariff on Chinese goods, have raised fears that these measures could lead to inflationary pressure in the US, potentially curbing oil demand in the region.
Meanwhile, predictions that Trump, who has consistently criticized high oil prices, will likely aim to keep prices within the $70-$80 per barrel range in order to fulfill his energy policy goals once in office, supported downward price movements.
On the other hand, the ceasefire and prisoner exchange agreement reached between Israel and Hamas has reduced the risk perception in the Middle East, home to the vast majority of global oil reserves, and pushed prices down.
Israeli President Isaac Herzog, in a post on his X social media account, said that he welcomed the Security Cabinet’s approval of the Gaza ceasefire and prisoner exchange agreement reached with Hamas and hoped for the same outcome from the government meeting.
The Security Cabinet approved the Gaza ceasefire and prisoner exchange agreement reached with Hamas.
By Humeyra Ayaz and Duygu Alhan
