Oil declines as investors await Trump’s decision on Russian export limits

Onome Amuge

Oil prices slipped on Monday, with traders tempering their initial concerns over supply disruptions caused by potential harsher sanctions, as the market digested reports that the incoming Trump administration may consider easing restrictions on Russia’s energy sector to secure an end to the ongoing Ukraine conflict.

Brent crude futures, the global benchmark for oil prices, slipped 28 cents, or 0.35 percent, to $80.51 a barrel on Monday, extending losses from a 0.62 percent decline in the previous session. The more actively traded U.S. West Texas Intermediate (WTI) crude for April delivery also dipped 21 cents, settling at $77.18 a barrel, with its front-month contract, expiring Tuesday, standing at $77.88 a barrel after a 1.02 percent decline on Friday.

As Donald Trump prepares to begin his second term as President of the United States, the markets await a flurry of policy announcements, including the lifting of the moratorium on U.S. liquefied natural gas (LNG) export licenses. This move, which is anticipated to be part of a wider economic strengthening strategy, could have far-reaching implications for global energy markets, analysts stated.

Despite the potential of nearly one million barrels per day of Russian oil being impacted by the new sanctions, ANZ analysts suggest that the recent price gains may be short-lived if President Trump delivers on his promise to facilitate a quick resolution to the Russia-Ukraine war, which could involve easing certain curbs to allow for a negotiated peace.

Tim Evans, an analyst, affirms that the new sanctions could indeed reduce supply in the short term, but the wildcard remains Trump’s actions and the possibility of a swift end to the conflict

Aside from the easing geopolitical tensions in the Middle East, with Hamas and Israel exchanging prisoners and hostages to reinforce a fragile ceasefire, investors also turned their attention to the potential consequences of a cold snap in Texas and New Mexico, which could affect U.S. oil production, according to analysts from ANZ and ING.

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