Oil prices fell on Friday, the first monthly decline since November. Markets focused on the new U.S. tariffs and the decision to resume oil exports from northern Iraq after watching the Oval Office discussion between the U.S. and Ukrainian presidents with astonishment.
Brent crude futures ended Friday down 86 cents, or 1.16%, at $73.18 a barrel. WTI crude futures ended down 59 cents, or 0.84%, at $69.76 a barrel.
Both indexes posted their first monthly declines in three months.
The WTI was gaining ground until an on-camera discussion in the Oval Office between the U.S. president and his delegation and Ukrainian President Volodymyr Zelenskyy over a possible ceasefire in the Russia-Ukraine war failed unpleasantly. But, the US delegation’s lack of state hospitality and courtesy has complicated matters.
This happened a positive outcome for Russia and, the potential to bring more oil to the market.
Trump threatened to withdraw support for Ukraine, and Zelensky left the White House without signing an agreement for the joint development of Ukraine’s mineral resources, and went to London which alleges to stand behind Ukraine.
Economists and market participants are struggling to gauge the impact of all the energy-related policy announcements made by the Trump administration this month.
Trump said on Thursday that his proposed 25% tariffs on Mexican and Canadian goods would go into effect on March 4, and that Chinese imports would be subject to a 10% additional tax. Let’s wait and see what the surprises of the brilliant diplomatic middle games will bring us.
Traders are choosing to avoid risk amid the increasing volatility triggered by Trump’s escalation of the tariff war, especially against China, and this is significantly increasing concerns about global demand.
The tariff war could slow global growth, trigger inflation and, in turn, suppress demand for crude oil.
Baghdad is set to announce the resumption of oil exports via the Iraq-Turkey pipeline, according to the Iraqi oil ministry.
The ministry said Iraq will export 185,000 barrels of oil per day through state oil marketer SOMO, and that amount will increase gradually.
Despite the expected announcement, eight international oil companies operating in the region said on Friday they would not resume exports because of a lack of clarity on commercial agreements and payment guarantees for past and future exports.
The resumption of exports raises questions about how Iraq will meet its OPEC+ obligations, as Iraq already regularly produces above its quota. If OPEC+ postpones the return of 120,000 bpd of barrels that were voluntarily cut from April, the increase in Iraq would exceed that limit.
The question is if OPEC+ members are discussing whether to increase oil production as planned in April or freeze it due to difficulties reading the global supply picture.
The hassle could send prices out of their current range. Oil prices are currently fluctuating within a trading range, but a delay could send prices soaring. In general, the seasonality of oil, gasoline, and diesel already increases around Easter.
