Published by Global Banking & Finance Review®
Posted on February 28, 2025
3 min readLast updated: January 25, 2026
Add as preferred source on GoogleOil prices fall due to U.S.-Ukraine tensions, new tariffs, and Iraq's resumed exports. Markets face first monthly drop since November.
By Erwin Seba
HOUSTON (Reuters) -Oil prices fell on Friday and were headed for their first monthly drop since November, as markets watched an Oval Office argument between the U.S. and Ukrainian presidents while also bracing for Washington's new tariffs and Iraq's decision to resume oil exports from the Kurdistan region.
Brent crude futures, which expired on Friday, settled at $73.18 a barrel, down 86 cents, or 1.16%. U.S. West Texas Intermediate crude futures finished at $69.76 a barrel, losing 59 cents, or 0.84%.
Both benchmarks are on track to post their first monthly decline in three months.
WTI was strengthening late in the session until an on-camera argument in the Oval Office broke out between U.S. President Donald Trump and Ukrainian President Volodymyr Zelenskiy over a possible cease-fire agreement in the Russia-Ukraine war.
"This translates to a favorable posture for Russia and the potential for them to get more oil on the market," said John Kilduff, partner with Again Capital LLC.
During the shouting match, Trump threatened to withdraw support for Ukraine and Zelenskiy left the White House without signing an agreement for joint development by the two countries of Ukraine's mineral resources.
Market participants are also struggling to gauge the impact of all the energy-related policy announcements made by the Trump administration this month, economists at Fitch's BMI research unit.
Trump on Thursday said his proposed 25% tariffs on Mexican and Canadian goods will take effect on March 4, along with an extra 10% duty on Chinese imports.
Traders are reducing risks amid rising volatility sparked by Trump stepping up the tariffs war, not least against China, significantly raising concerns about global demand, said Ole Hansen, head of commodity strategy at Saxo Bank.
A tariff war could slow global growth, spark inflation and, in turn, suppress crude demand.
Baghdad is set to announce the resumption of oil exports from the semi-autonomous Kurdistan region through the Iraq-Turkey pipeline, according to an Iraqi oil ministry statement.
Iraq will export 185,000 barrels per day through state oil marketer SOMO, and that quantity will gradually increase, the ministry said.
Despite the expected announcement, eight international oil firms operating in the Kurdistan region said they would not be resuming exports on Friday as there was no clarity on commercial agreements and guarantees of payment for past and future exports.
"The resumption of exports raises questions about how Iraq will comply with its OPEC+ obligations, having already regularly produced above its quota," said Harry Tchilinguirian, head of research at Onyx Capital Group.
"If OPEC+ delays a 120,000 bpd return of voluntary cut barrels starting in April, then the increase in Iraq will exceed that restraint," he added.
OPEC+ is debating whether to raise oil output in April as planned or freeze it as its members struggle to read the global supply picture, eight OPEC+ sources said.
A delay could break prices out of the current range in which they have been trading, said Phil Flynn, senior analyst with Price Futures Group.
"Currently, oil prices are fluctuating within a trading range, but a delay will give prices an upside breakout," Flynn wrote in a research note. "Generally, the seasonality of oil, gasoline, and diesel becomes bullish around Easter anyway."
(Reporting by Erwin Seba in Houston, Florence Tan, Mohi Narayan, Enes Tunagur and Arunima Kumar; Editing by David Evans, Kirsten Donovan and Nia Williams)
Oil prices fell due to a heated argument between U.S. President Trump and Ukrainian President Zelenskiy, alongside concerns over rising tariffs and their impact on global demand.
Trump's proposed tariffs on goods from Mexico, Canada, and China are raising concerns about a potential slowdown in global growth, which could suppress crude demand.
Iraq is set to resume oil exports from the Kurdistan region through the Iraq-Turkey pipeline, with an initial export of 185,000 barrels per day, although some firms are hesitant to resume operations.
OPEC+ is currently debating whether to increase oil output in April or maintain current production levels, as members assess the global supply situation.
A delay in OPEC+ decisions could lead to an upside breakout in oil prices, which are currently fluctuating within a trading range.
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