Oil prices fall as shifting US energy policies, global recession fears, and Israel-Hamas ceasefire ease geopolitical risks.
Oil prices decline as a result of U.S. President Donald Trump’s energy policies, including boosting fossil fuel production and reversing offshore drilling bans, as well as global factors like the strong U.S. dollar, reduced geopolitical risks, and recession concerns in Europe.
The international benchmark Brent crude fell by 0.3%, trading at $78.95 per barrel at 10.26 a.m. local time (0726 GMT), up from $79.22 at the close of the previous session.
The US benchmark West Texas Intermediate (WTI) decreased by 0.9%, reaching $76.33 per barrel, compared to its prior session close of $76.32.
The continued decline in oil prices is influenced by U.S. President Donald Trump’s declaration of a ‘national energy emergency’ at the start of his second term, signaling significant changes to energy policies.
A White House executive order emphasized that shortcomings in U.S. energy production pose an ‘extraordinary threat’ to economic and national security, with plans to boost fossil fuel production. Trump also signed an order to harness Alaska’s natural resources and reversed bans on offshore oil and gas drilling imposed during Joe Biden’s presidency.
Experts suggest these steps could increase supply in the short term and support downward price trends.
However, Trump’s promise to impose a 25% tariff on all goods from Mexico and Canada, and an additional 10% tariff on Chinese imports, has raised concerns about potential price increases in the U.S., leading to expectations of reduced oil demand and continued downward pressure on prices.
The U.S. dollar’s strength against other currencies is also dampening market appetite, further affecting prices. The dollar index rose 0.4% to 108.53 at 9:50 a.m. (6:50 GMT) compared to the previous trading session.
Additionally, the recent ceasefire agreement between Israel and Hamas has reduced geopolitical risks, alleviating concerns about global supply disruptions and keeping prices under pressure.
Meanwhile, ongoing recession fears in Europe, combined with the U.S.’s shifting trade policies, are heightening economic uncertainties.
Experts note that a softer approach by Trump toward trade tariffs with China could support demand from the world’s largest oil importer, preventing further significant price drops.
By Humeyra Ayaz
