Oil prices edged lower on Monday as investors weighed the potential impact of ceasefire talks between Russia and Ukraine, which could lead to an increase in Russian oil supply to global markets.
By 0409 GMT, Brent crude futures had slipped 25 cents, or 0.4%, to $71.91 a barrel, while US West Texas Intermediate (WTI) crude fell 20 cents, or 0.3%, to $68.08.
Both benchmarks had ended higher on Friday, marking a second consecutive weekly gain, as fresh US sanctions on Iran and an updated production plan from the OPEC+ alliance fueled expectations of tighter supply.
A US delegation is set to meet with Russian officials on Monday to push for a Black Sea ceasefire and a broader de-escalation of the war in Ukraine, following discussions with Ukrainian diplomats on Sunday.
“Expectations of progress in peace negotiations between Russia and Ukraine and a potential easing of US sanctions on Russian oil pressured prices lower,” said Toshitaka Tazawa, an analyst at Fujitomi Securities.
However, he noted that investors remain cautious as they assess future OPEC+ production trends beyond April.
OPEC+—which includes the Organisation of the Petroleum Exporting Countries and allies such as Russia—announced last Thursday that seven member nations would implement additional output cuts to offset previous overproduction. These reductions would exceed the monthly production increases the group plans to implement starting next month.
“Ukraine-Russia ceasefire talks raise the prospects of increased Russian exports on an eventual resolution, while the OPEC+ production hike as early as April points to further supply additions, which may be difficult to be fully absorbed by demand factors,” said Yeap Jun Rong, a strategist at Singapore-based IG.
Since 2022, OPEC+ has been curbing output by 5.85 million barrels per day—around 5.7% of global supply—to stabilise the market. On 3 March, the group confirmed that eight of its members would proceed with a monthly increase of 138,000 barrels per day from April, citing improved market fundamentals.
Traders are also monitoring the impact of new US sanctions on Iran, which were introduced last week.
According to Yeap, market sentiment toward oil prices has improved recently due to heightened supply risks from US sanctions on Iranian exports and speculation that US reciprocal tariffs may not be as severe as initially feared. However, he cautioned that the broader demand-supply outlook remains uncertain.
Faridah Abdulkadiri
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