Oil prices declined on Monday after President Donald Trump reversed the sanctions expected to be imposed on Colombia.
The initial sanctions threat stemmed from Colombia’s refusal to cooperate in the deportation of U.S.-based migrants.
Two U.S. military aircraft carrying deportees were turned away forcing President Trump to threaten comprehensive retaliatory measures, including economic sanctions and tariffs. However, the President’s subsequent decision to de-escalate the situation has shifted market sentiment.
West Texas Intermediate (WTI) crude futures fell by 2.3% to settle at $83.45 per barrel while Brent crude dropped 2% to $88.12 per barrel. Analysts attributed the price drop to reduced geopolitical risks and the market’s response to Trump’s softened stance.
Speaking on the reversal, President Trump said “We want to work with Colombia as partners, not adversaries. Sanctions are a tool, not a solution, and we’re committed to finding common ground.”
In a separate statement, President Trump reiterated his long-standing appeal to the Organization of the Petroleum Exporting Countries (OPEC) to lower prices.
“OPEC needs to step up. The American people shouldn’t bear the brunt of inflated oil prices,” he said during a press briefing.
Market watchers noted that the President’s reversal reflects an attempt to balance international relations with domestic economic priorities.
“The immediate risk of sanctions disrupting Colombian oil exports has been removed, and that’s been a relief to traders,” said Ryan McAllister, an energy strategist at Bright Futures Analytics.
While the de-escalation has provided short-term relief to the market, long-term concerns over global oil supply and demand persist. Factors such as U.S.-Iran relations, OPEC’s production decisions, and economic trends in key markets like China and India continue to weigh on crude prices.
With oil prices remaining a focal point of the global economy, analysts caution that market volatility is likely to persist in the coming weeks. For now, President Trump’s decision has alleviated one of the many pressures impacting the energy market.
