Crude Oil Tumbles Amid Rising Geopolitical Tensions, U.S. Dollar Slide

(RTTNews) - Crude oil slumped on Thursday due to rising political tensions, with a resolution to Russia-Ukraine conflict through diplomacy continuing to be evasive along with a fresh confrontation brewing in Latin America.

In addition, a decrease in the U.S. dollar added downward pressure on oil prices.

WTI Crude Oil for January delivery was last seen trading down by $0.88 (or 1.51%) at $57.58 per barrel.

On the geopolitical front, in Europe, the Russian offensive to occupy the eastern Ukraine continues.

Ukraine's security services (SBU) conducted a long-range drone strike on the Vladimir Filanovsky offshore oil field in the northern sector of the Caspian Sea, owned by Russian oil major Lukoil.

Four drones struck the offshore platform, resulting in the suspension of oil and gas production from around its 20 wells.

Meanwhile, efforts by U.S. President Donald Trump to end the war through diplomatic measures have hit a wall.

Ukraine rejected a U.S. peace plan, alleging it to be favoring Russia and compelling Ukraine to concede territories to Russia.

Ukraine President Volodymyr Zelenskyy, who has the support of several European leaders, stated that Ukraine will not cede any region and added that he would be offering a revised and updated peace proposal to the U.S. negotiators.

Meanwhile, Trump stated that he had a "strong exchange of words" with the European leaders during his conversation with them on his ceasefire proposal.

Trump also asked Zelenskyy to understand the reality. However, Trump added that he is waiting to see what Ukraine comes up with in their new draft.

Some experts view Trump's comments as a deflection from a previous Ukraine-friendly stance to a pro-Russia posture.

In a major escalation of tensions between the U.S. and Venezuela, U.S. authorities including the Coast Guard, FBI, and Homeland Security seized a large oil tanker off the coast of Venezuela. The ship has been under U.S. sanctions for many years.

Confirming the seizure, Trump stated that "other things are happening" hinting that more offensive measures may follow soon.

In response, Venezuela's President Nicolas Maduro called this "a blatant theft" by the U.S. in its move to plunder the rich energy resources of Venezuela.

In the recently released National Security Strategy, Trump had advocated employing a strong U.S. influence in Latin America.

With over 30 sanctioned oil vessels trading with Venezuela, the prospect of a major disruption to oil flow has increased.

These actions have been welcomed by Venezuela's opposition leader Maria Corina Machada who called Trump's moves "decisive."

The Organization of the Petroleum Exporting Countries has maintained its outlook for oil demand for 2026 at an average 43 million barrels per day even while it prepares to pause output hikes in early 2026.

However, the alliance modestly raised its forecast for this year's supply growth from rival producers.

The cartel predicts demand growth of 1.3 million barrels a day in 2025 and 1.38 million barrels a day in 2026. Supply from non-OPEC+ nations is estimated to rise by 960,000 barrels per day for this year with supply growth pegged at 630,000 bpd.

The International Energy Agency has lowered its forecast for global oil supply growth to 3 million barrels a day this year and 2.4 million the next, lowering earlier projections of 3.1 million and 2.5 million barrels a day.

For 2026, demand for oil is expected to rise by 860,000 bpd, up 90,000 bpd from last month's outlook and for 2025, it is expected to raise by 40,000 bpd to 830,000 bpd.

The much-anticipated U.S. Federal Reserve meeting concluded yesterday with the Fed lowering the rates by a quarter point to bring it to the 3.50% to 3.75% range.

The U.S. dollar index was last seen trading at 98.25, down by 0.53 (or 0.54%) today.