Oil prices fell on Tuesday after Ukraine's President Volodymyr Zelenskiy agreed to a truce with Russia covering the Black Sea and energy infrastructure, though crude losses were limited by the prospect of global supply tightening due to threatened U.S. tariffs on countries buying Venezuelan production.
Brent crude futures were down 15 cents, or 0.21%, at $72.85 a barrel by 1:14 pm ET (1714 GMT). U.S. West Texas Intermediate crude fell 25 cents, or 0.36%, to $68.86.
Zelenskiy said the truce was effective immediately on Tuesday but added that he would seek more weapons from U.S. President Donald Trump and sanctions against Russia if Moscow broke the deals.
"If there's a ceasefire between Russia and Ukraine, it might open the door for the reduction of sanctions on Russian oil," said Phil Flynn, senior analyst with Price Futures Group.
The United States reached separate agreements on Tuesday with Ukraine and Russia to ensure safe navigation in the Black Sea and to implement a ban on attacks by the two countries on each other's energy facilities, Reuters reported.
However, Trump's threat of tariffs against countries importing oil and gas from Venezuela has raised supply concerns, and both benchmarks rose more than 1% on Monday following the announcement.
Oil is Venezuela's main export. And China, which is already the target of U.S. import tariffs, is its largest buyer.
The Trump administration also on Monday extended a deadline to May 27 for U.S. producer Chevron (NYSE:CVX) to wind down operations in Venezuela
The withdrawal of Chevron's licence to operate could reduce production in the country by about 200,000 barrels per day, according to ANZ analysts.
Meanwhile, OPEC+, the Organization of the Petroleum Exporting Countries and allies including Russia, will likely stick to its plan to raise oil output for a second consecutive month in May, four sources told Reuters, amid steady oil prices and plans to force some members to reduce pumping to compensate for past overproduction.
Last week, the U.S. issued new sanctions intended to hit Iranian oil exports.
Trump also said automobile tariffs are coming soon even as he indicated that not all of his threatened levies would be imposed on April 2 and some countries may get breaks, a move Wall Street took as a sign of flexibility on a matter that has roiled markets for weeks.
