Oil prices retreated on Thursday as traders redirected attention toward developments in Russia-Ukraine peace negotiations while weighing the potential implications of a U.S. seizure of a sanctioned oil tanker off the coast of Venezuela.
Brent crude oil, against which Nigerian crude oil is priced, fell 1.3% to $61.40 per barrel, while U.S. West Texas Intermediate (WTI) declined by the same margin to $57.68 per barrel as of 0904 GMT.
The movement follows a brief uptick in prices a day earlier, driven by heightened geopolitical tension surrounding the tanker seizure.
Market analysts noted that the easing of immediate supply concerns contributed to Thursday’s pullback.
According to Russian Foreign Minister Sergei Lavrov, recent diplomatic engagements with Washington helped resolve several points of misunderstanding between both countries.
Moscow also confirmed that it had submitted its proposals for collective security guarantees to the United States, signalling renewed diplomatic momentum.
The U.S. tanker seizure briefly lifted prices on Wednesday after President Donald Trump disclosed that U.S. forces had intercepted what he described as “the largest tanker ever” near Venezuela. Although U.S. officials did not disclose the vessel’s identity, maritime intelligence firm Vanguard later identified it as the Skipper.
Despite the political implications, analysts noted the incident has not yet translated into meaningful supply disruption.
“So far, the seizure has not trickled down to the market, but further escalation will impose heavy crude price volatility,” said Emril Jamil, Senior Oil Analyst at LSEG. “The market remains in limbo, eyeing the Russian-Ukraine peace deal progress.”
Separately, traders reported increasing risk premia for Venezuelan crude amid heightened U.S. military presence in the Caribbean and abundant discounted supply from sanctioned producers in Russia and Iran. Asian refiners are demanding deeper price concessions to compensate for shipping and compliance risks.
Diplomatic efforts remain a key driver of market sentiment. Leaders from Britain, France, and Germany held coordinated discussions with President Trump on Washington’s latest proposals to advance the Ukraine peace process.
The talks come amid continued military activity, including a Ukrainian drone strike on a Russian-owned oil platform in the Caspian Sea, which halted production at the facility.
Meanwhile, the International Energy Agency raised its 2026 global oil demand growth forecast while moderating its supply projections, pointing to a narrower market surplus next year. The updated assessment provided a modest counterweight to bearish sentiment.
In monetary policy developments, the U.S. Federal Reserve delivered a split decision that resulted in a reduction of its benchmark interest rate.
Lower borrowing costs typically support broader economic activity and, by extension, oil demand, though the immediate market reaction remained muted as geopolitical factors dominated trading.
Oil markets are expected to remain sensitive to diplomatic signals and security developments in the coming sessions, with traders closely monitoring both the trajectory of U.S.–Russia relations and the pace of peace negotiations involving Ukraine.