WTI inches lower to near $69.00 following US agreements with Ukraine, Russia
- WTI price declines as the US reaches a truce with Ukraine and Russia, potentially enabling Russian Oil to re-enter global markets.
- President Trump signs an order imposing a 25% tariff on imports from countries buying Venezuelan Oil.
- API Weekly Crude Oil Stock data shows a 4.6-million-barrel drop in US crude inventories last week.
West Texas Intermediate (WTI) crude Oil price paused its two-day winning streak, trading around $69.00 per barrel during early European hours on Wednesday. The decline of the crude Oil prices comes as geopolitical tensions ease following separate agreements by the United States (US) with Ukraine and Russia to suspend attacks at sea and on energy infrastructure. As part of the deal, Washington agreed to push for lifting certain sanctions against Moscow, potentially allowing Russian Oil to re-enter global markets.
The US-Russia agreement extends further, with Washington committing to efforts aimed at easing international sanctions on Russian agricultural and fertilizer exports—a long-standing demand from Moscow. However, the Kremlin stated that the Black Sea agreements would not take effect unless connections between certain Russian banks and the international financial system were restored.
Despite this, Oil prices found support amid supply concerns after US President Donald Trump signed an order imposing 25% tariffs on imports from countries purchasing Venezuelan Oil, potentially disrupting flows to major refiners in China, India, and Spain.
Also, Chevron has begun scaling back its tanker fleet in Venezuela, according to shipping data and a document reviewed on Tuesday. However, the Trump administration also extended Chevron’s deadline to exit Venezuela until May 27, with analysts estimating its withdrawal could reduce production by 200,000 barrels per day (bpd).
Additional support for Oil prices came from American Petroleum Institute (API) Weekly Crude Oil Stock data, which showed a significant 4.6-million-barrel decline in US crude inventories last week—well above market expectations of a 2.5-million-barrel drop. This suggests strong fuel demand in the world's largest economy.
WTI Oil FAQs
WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.
Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.
The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
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