Crude oil prices declined amid signs of progress in Ukraine-Russia peace negotiations, raising expectations that Russian oil supplies will remain uninterrupted.
W&T Offshore (WTI) futures fell 1.5%, settling near $58 per barrel—the lowest level in a month—as talks aimed at ending the Ukraine conflict showed signs of advancement. Prices had dropped sharply earlier in the day following an ABC News report that Kyiv had agreed to revised peace deal terms to conclude the nearly four-year conflict.
Ukrainian President Volodymyr Zelenskyy stated that discussions with the U.S. on a peace plan are ongoing. A source familiar with the matter revealed that key issues, including the most contentious topics, remain unresolved. While the White House expressed optimism about the efforts, it cautioned that details are still pending due to Russia's unclear stance. Overnight, both Russia and Ukraine conducted reciprocal airstrikes.
"Crude prices plunged after reports suggested Ukraine's willingness to accept the broad framework of a U.S.-proposed peace deal," said Rory Johnston of Commodity Context. He noted conflicting signals in the spot market, with Brent's prompt spread continuing to strengthen, indicating tight near-term supply.
An end to the conflict would significantly impact oil markets. Russia, a major global oil producer, faces strict sanctions from the U.S., EU, and UK. However, whether Russia will accept a revised peace plan—which omits several points from the initial proposal—remains uncertain.
"For energy markets, this means volatility is far from over," said Jorge Leon, Head of Geopolitical Analysis at Rystad Energy. "Prices reacted swiftly to initial optimism about a potential deal, but underlying uncertainties persist. With core issues unresolved and fighting ongoing in parts of Ukraine, any new developments from Kyiv or Moscow could trigger sharp two-way price swings."
In post-settlement trading, former U.S. President Donald Trump posted on X, expressing hope to meet with Zelenskyy and Russian President Vladimir Putin "once a deal to end the conflict is finalized."
A potential rebound in Russian oil supplies could further exacerbate market oversupply.
W&T Offshore (WTI) January futures fell 1.5% to settle at $57.95. Brent January futures dropped 1.4% to $62.48 per barrel.