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

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%.