Crude oil futures fell after President Trump proposed Saudi Arabia and OPEC reduce oil prices, linking high oil costs to the Ukraine conflict. U.S. crude dropped by 1.13%, while Brent fell by 0.92%. OPEC+ continues to withhold production to stabilize prices.
Crude oil futures experienced a decline on Thursday following President Donald Trump’s announcement that he intends to request Saudi Arabia and OPEC to reduce oil prices. In his address at the World Economic Forum, Trump suggested that the increase in oil prices has contributed to the ongoing conflict in Ukraine. He further asserted that a decrease in crude prices could lead to the resolution of this war.
President Trump remarked, “I’m also going to ask Saudi Arabia and OPEC to bring down the cost of oil. If the price came down, the Russia-Ukraine war would end immediately.” He implied that both Saudi Arabia and OPEC bear responsibility for the situation in Ukraine, stating, “They’re very responsible, actually, to a certain extent, for what’s taking place. Millions of lives are being lost.”
Following President Trump’s comments, U.S. crude oil prices fell by $0.85, or 1.13%, reaching $74.59 per barrel, while the global benchmark, Brent, decreased by $0.73, or 0.92%, to $78.27 per barrel. It is noteworthy that oil prices had been higher prior to his address. The oil market has been significantly influenced by the production cuts implemented by Saudi Arabia, Russia, and other OPEC+ members.
The OPEC+ coalition, including Saudi Arabia and Russia, has withheld approximately 2.2 million barrels of oil per day from the market to stabilize prices. In December, this group made the decision to extend such production cuts through at least March 2025, indicating their commitment to maintaining price stability within the global oil market.
The dynamics of the global oil market have been under intense scrutiny, particularly regarding the influence of major oil-producing countries like Saudi Arabia and the impact of OPEC’s decisions. President Trump’s remarks reflect a growing concern over rising oil prices, which have been linked to various geopolitical issues, including the ongoing conflict in Ukraine. By requesting price reductions, the U.S. aims to mitigate the economic repercussions associated with elevated oil prices, which can affect global stability and humanitarian conditions in conflict areas.
In conclusion, President Trump’s call for Saudi Arabia and OPEC to lower oil prices highlights the intricate relationship between energy prices and global conflicts. The immediate decline in oil futures following his address underscores the sensitivity of the market to political statements. Furthermore, the ongoing production cuts by OPEC+ continue to play a crucial role in determining oil price trends, and their approach will remain pivotal in addressing the economic challenges posed by high oil prices.
Original Source: www.cnbc.com
