Geopolitical Tensions and Supply Concerns

Geopolitical Tensions and Supply Concerns

In our last update, we highlighted how the start of potential peace talks between the U.S., Russia, and Ukraine on February 12, 2025, caused a decline in crude oil prices due to a decrease in geopolitical risk. However, recent events indicate that this optimism might have been short-lived, as renewed tensions and economic uncertainty are causing fluctuations in Brent and WTI prices. 

Despite the initial positive response to peace negotiations, tensions flared again after Ukrainian President Volodymyr Zelensky’s visit to the U.S. on February 28. Rather than strengthening support for Ukraine, his meeting with President Trump led to public disagreements, creating uncertainty about the future of the negotiations. Investors who had hoped for a quick resolution are now faced with adjusting their expectations ( Reuters). 

    OPEC+ and Economic Pressures

At the same time, OPEC+ had planned to ease production cuts in April. However, with members struggling to assess the global supply outlook amid new U.S. sanctions on Venezuela, Iran, and Russia, discussions have emerged about potentially delaying these increases. Additionally, Trump´s proposed 25 % tariff on European imports has raised concerns about a potential economic slowdown, further impacting crude oil demand ( Finansavisen). 

    What’s Next for Brent and WTI?

With ongoing geopolitical instability, uncertainty surrounding OPEC+, and trade tensions, crude oil prices remain highly responsive to changing market conditions. Will Brent and WTI achieve stability, or is more volatility on the horizon? 

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