Oil Prices Slip as Trump Urges OPEC to Cut Prices

Oil prices experienced a significant decline on Monday, falling more than 1% following U.S. President Trump’s renewed call for OPEC to reduce oil prices. This call came shortly after the announcement of extensive measures aimed at boosting U.S. oil and gas output during Trump’s first week in office.

Brent crude futures dropped by 87 cents, or 1.11%, to $77.63 a barrel by 0043 GMT, marking a reversal from the 21 cents increase seen on Friday. Similarly, U.S. West Texas Intermediate crude fell by 89 cents, or 1.19%, to $73.77 a barrel.

Trump reiterated his demand for the Organization of the Petroleum Exporting Countries to lower oil prices, suggesting that this action could financially strain oil-rich Russia and potentially expedite an end to the war in Ukraine. “One way to stop it quickly is for OPEC to stop making so much money and drop the price of oil… That war will stop right away,” Trump stated.

Despite Trump’s threats to impose taxes, tariffs, and sanctions on Russia and other countries if a resolution to the Ukraine conflict is not reached soon, OPEC and its allies, including Russia, have not yet responded to his call. OPEC+ delegates have indicated that a plan to increase oil output from April is already in motion.

Both oil benchmarks recorded their first decline in five weeks last week, as concerns about potential disruptions to Russian oil supplies due to sanctions eased. Analysts from Goldman Sachs predict that Russian production will not be significantly impacted, as higher freight rates have encouraged the supply of non-sanctioned ships to transport Russian oil, and the discount on the affected Russian ESPO grade is attracting price-sensitive buyers.

However, JP Morgan analysts argue that some risk premium is justified, given that nearly 20% of the global Aframax fleet currently faces sanctions. They suggest that the application of sanctions on the Russian energy sector as leverage in future negotiations could have varying outcomes, indicating that a zero risk premium is not appropriate.

Further trade disruptions are anticipated following Trump’s announcement of sweeping retaliatory measures against Colombia, including tariffs and sanctions, after the country turned away two U.S. military aircraft carrying deported migrants. The U.S. is the largest buyer of Colombia’s seaborne crude exports, accounting for 41% of Colombia’s total in 2024, according to data from analytics firm Kpler.