Oil prices fell Thursday as U.S. President Donald Trump talked up a potential peace treaty between Russia and Ukraine, which could potentially free up Russian oil supply curbed by U.S. sanctions. 

At 09:00 ET (14:00 GMT), Brent oil futures expiring in April fell 1.3% to $74.22 a barrel, while West Texas Intermediate crude futures fell 1.3% to $70.44 a barrel.

Ukraine peace talks likely 

Trump said on Wednesday that both Russian President Vladimir Putin and Ukraine President Volodymyr Zelenskiy had expressed a desire to end their long-running conflict, during separate phone calls with him. Trump said he had now instructed top U.S. officials to begin peace talks. 

This came after Defense Secretary Pete Hegseth said Ukraine will no longer seek membership in the NATO alliance, or to take back all of its territory seized by Russia. Ukraine’s inclusion in NATO had been a major point of contention for Moscow. 

A peace treaty could bring an end to the long-running conflict, and could result in the lifting of strict U.S. sanctions against Russian crude, which could free up substantially more supplies. 

Inflation jitters weigh on crude 

Oil markets were also grappling with hotter-than-expected U.S. inflation data.

Headline U.S. producer prices increased at a hotter-than-anticipated pace in January, according to data released earlier Thursday, in the latest sign of lingering inflationary pressures that are likely to dent bets for possible Federal Reserve interest rate cuts this year.

The producer price index for final demand rose 0.4% on a month-on-month basis, higher than 0.3% forecast, while in the twelve months through January, the PPI grew by 3.5%, compared with 3.5% in the preceding month and expectations of 3.2%.