By Scott DiSavino
NEW YORK (Reuters) – Oil prices eased about 1% on Tuesday as U.S. President Donald Trump and Russian President Vladimir Putin discussed moves to end the three-year-old war in Ukraine, which could result in a possible easing of sanctions on Russian fuel exports.
Earlier in the day, prices hit a two-week high on worries that instability in the Middle East could reduce oil supplies, and hopes that economic stimulus plans in China and Germany could boost demand for the fuel in two of the world’s biggest economies.
Brent futures fell 52 cents, or 0.7%, to $70.55 a barrel by 12:33 p.m. EDT (1633 GMT), while U.S. West Texas Intermediate (WTI) crude fell 66 cents, or 1.0%, to $66.92.
Even if the U.S. and Russia work out a ceasefire in Ukraine, many analysts said they expect it will take a long while before Russian energy exports increase in a major way.
“Russian fossil fuels might at some stage resurge in abundance without sanction shackles, but … (that) does not mean the energy largesse will be lifted,” analysts at oil broker PVM said in a note.
Russia produced about 9.2 million barrels per day (bpd) of crude in 2024, down from a recent high of 9.8 million bpd in 2022 and a record 10.6 million bpd in 2016, according to U.S. Energy Information Administration (EIA) data going back to 1997.
In the Middle East, U.S. President Trump vowed to continue the U.S. assault on Yemen’s Houthis unless they end their attacks on ships in the Red Sea.
Trump said he would hold Iran responsible for any attacks carried out by the Houthi group that it backs in Yemen. If the U.S. acts against Iran, or the Houthis act against other Arab producers, global oil supplies could decline.
Iran, a member of the Organization of the Petroleum Exporting Countries (OPEC), produced about 3.3 million bpd of crude in 2024, according to the U.S. EIA.
Elsewhere in the Middle East, Israeli air strikes in Gaza killed over 400 people, Palestinian health authorities said, as attacks ended a weeks-long standoff over extending a ceasefire that halted fighting in January.
In Nigeria, an OPEC member, a blast struck the Trans Niger oil pipeline, its owner confirmed on Tuesday. The pipeline can transport around 450,000 bpd from onshore fields to the Bonny export terminal.
In Germany, Europe’s biggest economy, parliament approved plans for a massive spending surge, throwing off decades of fiscal conservatism in hopes of reviving economic growth.
In China, the world’s second biggest economy, retail sales growth quickened in January-February in a welcome sign for policymakers’ efforts to boost domestic consumption even as joblessness rose and factory output eased, underscoring the strains on an economy facing fresh U.S. tariffs.
ECONOMIC WORRIES
In the U.S., the world’s biggest economy, U.S. single-family homebuilding rebounded sharply in February amid a thaw in winter weather, but rising construction costs from tariffs and labor shortages threaten the recovery.
The Organisation for Economic Co-operation and Development (OECD) warned that U.S. tariffs would reduce economic growth in the U.S., Canada and Mexico, and weigh on global energy demand.
Analysts at energy data and analytics firm Wood Mackenzie projected Brent crude oil prices would average $73 per barrel in 2025, down $7 per barrel from 2024 due to U.S. tariff policies and OPEC+ plans to boost output.
Earlier this month, OPEC+, which includes OPEC and allies like Russia and Kazakhstan, decided to proceed with a planned oil output increase in April.
U.S. OIL INVENTORIES
U.S. oil inventory data from the American Petroleum Institute (API) trade group is due on Tuesday and the U.S. EIA on Wednesday. [EIA/S] [API/S]
Analysts forecast energy firms added about 0.9 million barrels of oil to U.S. stockpiles during the week ended March 14.
That compares with a decrease of 2.0 million barrels during the same week last year and an average build of 1.6 million barrels over the past five years (2020-2024).
(Reporting by Scott DiSavino in New York, Paul Carsten in London, Colleen Howe in Beijing and Emily Chow in Singapore; Editing by Jacqueline Wong, Clarence Fernandez, Kim Coghill, Ed Osmond, Alexandra Hudson)
