Oil Prices Surge to One-Week High as US-Russia Tensions Rise and Fed Rate Cut Hopes Boost Market

Brent and WTI crude prices climbed over 2% on August 14, reaching their highest levels in a week, as escalating US-Russia tensions over Ukraine and expectations of a Fed rate cut in September supported oil markets.

Brent and WTI Post Strong Gains on August 14

Global oil prices rose sharply on Thursday, August 14, hitting their highest levels in a week, as tough remarks from US President Donald Trump on negotiations with Russia heightened fears of potential supply disruptions.

Brent crude: up $1.21 (+1.84%) to $66.84/barrel

WTI crude: up $1.31 (+2.09%) to $63.96/barrel

This marked the first increase after three consecutive days of declines and pushed Brent out of “oversold” technical territory, closing at its highest since August 6.

Background: Oil Recently Hit Multi-Week Lows

Earlier in the week, Brent crude settled at its lowest level since June 5, while WTI dropped to its weakest since June 2.
The declines were partly driven by supply and inventory data released by the US Energy Information Administration (EIA) and the International Energy Agency (IEA).

US-Russia Tensions Add to Price Risk

On August 14, President Trump suggested that Russian President Vladimir Putin was ready to reach a peace deal to end the conflict in Ukraine, following Moscow’s signal of interest in a nuclear arms agreement ahead of a summit in Alaska.

However, just a day earlier, Trump warned of “serious consequences” if no peace agreement was reached — including possible harsher economic sanctions.

Russia, the world’s second-largest oil producer after the US, could significantly boost exports if sanctions are eased, potentially impacting global supply-demand dynamics.

Threat of Secondary Tariffs on Buyers of Russian Oil

Trump also threatened secondary tariffs on countries that continue importing Russian crude — particularly China and India — if Moscow prolongs the war in Ukraine.

Such measures could put additional economic pressure on Russian oil buyers and increase volatility in global energy markets.
However, some analysts remain skeptical about the likelihood of US actions that would cause major disruptions to supply.

Fed Rate Cut Expectations Lend Support to Oil Prices

Investor sentiment was further supported by expectations that the US Federal Reserve will cut interest rates in September 2025.
Lower rates tend to stimulate economic growth and boost energy demand.

Most market participants anticipate a rate cut next month after July CPI showed moderate growth.

However, July PPI posted its strongest increase in three years, underscoring the Fed’s dilemma between containing inflation and supporting the economy.

Short-Term Outlook for Oil

Oil prices are currently buoyed by geopolitical risks and potential monetary easing.
Nevertheless, the outcome of US-Russia peace talks and upcoming US economic data will be key factors in determining the next direction for global energy markets.