Oil prices fell around 2% on Thursday after Donald Trump eased earlier threats related to Greenland and Iran, while markets reassessed the global supply-and-demand balance.
Brent crude futures dropped $1.01, or 1.6%, to $64.23 per barrel by 11:26 a.m. EDT (1626 GMT). U.S. West Texas Intermediate (WTI) crude declined by 96 cents, also 1.6%, to $59.66 a barrel, putting it on track for its lowest closing level since January 15.
Trump said the United States had secured permanent and unrestricted access to Greenland through an agreement with NATO. NATO’s leadership added that member states would need to strengthen Arctic security efforts in response to potential threats from Russia and China.
At the same time, Trump stepped back from tariff threats and ruled out using force to take control of Greenland, softening a position that had previously strained relations between the U.S. and its European allies.
“The risk premium linked to the Greenland issue has eased, and concerns over Iranian supply have also diminished,” said Ole Hansen, chief commodity analyst at Saxo Bank.
Trump also stated that he hoped no further U.S. military action would be needed in Iran, while warning that Washington would respond if Tehran restarted its nuclear programme. Iran, despite operating under sanctions, remains the third-largest oil producer within OPEC, behind Saudi Arabia and Iraq.
With geopolitical tensions cooling, oil prices could stabilize near $60 a barrel, according to Tony Sycamore, an analyst at online broker IG.
Russia, Ukraine and global supply
Trump renewed calls for an end to the war in Ukraine and said discussions with Ukrainian President Volodymyr Zelenskiy at Davos had been “good.” U.S. and Ukrainian officials have engaged in weeks of shuttle diplomacy, with Washington pushing for a peace agreement after nearly four years of conflict.
Any deal that leads to sanctions relief for Russia — the world’s third-largest oil producer — could increase global supply and place further downward pressure on prices.
Meanwhile, the French navy intercepted a Russian oil tanker in the Mediterranean suspected of being part of a “shadow fleet” used to bypass sanctions. Russian oil production slipped 0.8% last year to 10.28 million barrels per day, roughly 10% of global output, according to data released on Thursday.
In Venezuela, another sanctioned OPEC member, trading house Vitol is preparing to export Venezuelan fuel oil under a U.S.-backed agreement following the capture of President Nicolas Maduro, sources familiar with the matter said. Increased Venezuelan exports could add to supply and weigh on prices.
Oil markets were also pressured by slightly weaker expectations for European corporate earnings. Companies in Europe are now forecast to report a 4.2% decline in fourth-quarter 2025 earnings, according to LSEG I/B/E/S data, compared with a 4.1% drop expected a week earlier.
However, Amin Nasser, chief executive of Saudi Aramco, said fears of a global oil glut are overstated, noting that demand growth remains strong and global stockpiles are relatively low.
U.S. oil inventories
Traders are awaiting fresh data from the U.S. Energy Information Administration, with analysts expecting U.S. crude inventories to rise by 1.1 million barrels in the week ended January 16. On Wednesday, the American Petroleum Institute reported a larger-than-expected build of 3.0 million barrels, according to market sources.
Both reports were released a day later than usual due to the U.S. Martin Luther King Jr. holiday.
