US Oil Prices Plummet Amid Trump-Putin Meeting Announcement

US oil prices fell on the announcement of a Trump-Putin meeting, while Mexico pivoted towards fracking to boost Pemex oil and gas production. The September WTI crude oil contract closed down $0.47 to settle at $63.88 per barrel. Equities fell intraday as markets weighed earnings, while energy stocks rose Thursday afternoon. North Sea crude-WTI rose after a deal, and Chevron-chartered tankers began returning to Venezuela following a US license. Cheniere Energy and JERA signed a long-term LNG supply deal through 2050.

US oil prices experienced a significant drop on Wednesday, August 6, following the announcement of a meeting between US President Donald Trump and Russian President Vladimir Putin. The uncertainty surrounding potential US sanctions on Russia created market unease, leading to a decrease in both Brent and WTI crude prices. Brent crude futures fell by 75 cents, or 1.1%, to settle at $66.89 a barrel, while US West Texas Intermediate crude dropped by 81 cents, or 1.2%, to settle at $64.35 [1].

The meeting between Trump and Putin, facilitated by special envoy Steve Witkoff, raised questions about the US's stance on sanctions against Russia. Trump mentioned that "great progress" was made in talks with Putin, but no further details were provided. This ambiguity has contributed to the market's volatility, as any potential deal could ease sanctions on Russia and allow it to increase oil exports [1].

Earlier in the day, oil prices had risen due to an executive order by Trump imposing a 25% tariff on goods from India, which indirectly imported Russian oil. The new import tax is set to take effect 21 days after August 7. This move has added to the uncertainty in the market, with analysts expecting more clarity on the situation before the deadline [1].

Mexico, meanwhile, has announced a shift in its energy policy, pivoting towards hydraulic fracturing (fracking) to boost oil and gas production. The country's state-owned oil company, Pemex, has been facing declining production, with output dropping from around 3.4 million barrels per day in the early 2000s to 1.6 million barrels per day currently. The new 10-year plan aims to revitalize Pemex by tapping into unconventional hydrocarbon deposits, with a focus on shale basins [2].

The plan, unveiled on August 7, highlights the potential for significant production increases, with estimates suggesting a cumulative addition of 197 million barrels of crude oil and 303 billion cubic feet of gas by 2030. The plan emphasizes technological advancements that minimize environmental impacts and preserve freshwater resources. This shift marks a change from previous policies that ruled out fracking due to environmental concerns [2].

The September WTI crude oil contract closed down $0.47 to settle at $63.88 per barrel on August 7, reflecting the broader market sentiment [3]. Equities fell intraday as markets weighed earnings, while energy stocks rose in the afternoon. North Sea crude-WTI rose after a deal, and Chevron-chartered tankers began returning to Venezuela following a US license. Cheniere Energy and JERA signed a long-term LNG supply deal through 2050, indicating continued investment in the energy sector [3].

References:
[1] https://www.reuters.com/business/energy/oil-prices-slide-8-week-low-us-russia-talks-stir-sanction-uncertainty-2025-08-06/
[2] https://www.reuters.com/business/energy/mexico-pivots-towards-fracking-lift-pemex-oil-gas-production-2025-08-07/
[3] https://www.marketscreener.com/news/mexico-pivots-towards-fracking-to-lift-pemex-oil-and-gas-production-ce7c5edfd08ff326