Oil prices dipped on Monday following the Trump administration’s decision to retract threats of sanctions against Colombia over illegal immigration, easing fears of potential disruptions to oil supplies. According to data from analytics firm Kpler, Colombia sent approximately 41% of its seaborne crude exports to the U.S. in the previous year.
Brent crude for March delivery fell 1.99% to $76.94 per barrel at 9:50 AM ET, while WTI crude for February delivery dropped 2.2%, trading at $73.02 per barrel.
“The Government of Colombia has agreed to all of President Trump’s terms, including the unrestricted acceptance of all illegal aliens from Colombia returned from the United States, including on U.S. military aircraft, without limitation or delay,” White House press secretary Karoline Leavitt stated late Sunday.
The U.S. swiftly withdrew its plans to impose tariffs and sanctions on Colombia after the country consented to accept deported migrants from the United States. However, market concerns persist regarding Trump’s unpredictable policy maneuvers.
“There is a widespread sense of unease in the market. Even if the sanctions didn’t materialize, the uncertainty remains, as Trump continues to assert his dominance to achieve his goals,” said Bjarne Schieldrop, chief commodities analyst at SEB. “Fundamentally, the market remains surprisingly tight,” he added.
Trump also commented on the Ukraine war and OPEC, stating, “One way to stop it quickly is for OPEC to stop making so much money and drop the price of oil … That war will stop right away.”
Despite Trump’s remarks, OPEC+ appears unperturbed and remains committed to its earlier plans to begin increasing oil production from April. Standard Chartered analysts suggest that OPEC+’s decision to delay the planned output boost by three months to April 2025, and to extend the complete removal of production cuts until the end of 2026, will help prevent an oversupply in 2025.
By both postponing the start of voluntary production cut unwinds and moderating the pace of monthly increases, OPEC+ has effectively adjusted the supply outlook for the coming years.
Oil traders remain cautious as geopolitical tensions and supply chain uncertainties continue to influence market sentiment. Additionally, the fluctuating stance of the U.S. administration adds further unpredictability to the global oil landscape.
Looking ahead, market analysts predict continued volatility, with upcoming policy decisions and macroeconomic factors playing a crucial role in shaping oil price movements.
