The oil price selloff accelerated on Wednesday after U.S. President Donald Trump took the first big step towards ending Russia’s war in Ukraine three weeks after his inauguration.

In Asian trading on Thursday, Brent crude for April delivery sank nearly a percentage point to trade at $74.48 per barrel at 00.53  ET, while WTI crude for March delivery declined the same to $70.70 per barrel.

On social media, Trump said he and Putin “agreed to have our respective teams start negotiations immediately, and we will begin by calling President Zelenskiy, of Ukraine, to inform him of the conversation, something which I will be doing right now.”

A ceasefire to the Russia-Ukraine war could be bearish for oil prices if Trump pushes for removal of sanctions on the Russian energy industry, Tyler Richey, co-editor at Sevens Report Research, told MarketWatch. Geopolitical stability may also “largely extinguish the still simmering ‘fear bid’ in the oil market.” The latest sanctions by the Biden administration roughly tripled the number of directly sanctioned Russian crude oil tankers, enough to affect around 900,000 barrels per day (bpd). Whereas it’s highly likely that Russia will try to circumvent the sanctions by employing even more shadow fleet tankers and ship-to-ship transfers, StanChart sees 500,000 bpd of displacements over the next six months.

Source: OILPRICE