Crude oil prices continued their decline today, extending a trend that began last week. The drop is linked to growing speculation that the war in Ukraine may be nearing its end.
Brent crude was priced at $74.77 per barrel, while West Texas Intermediate stood at $70.68 per barrel. This comes as top U.S. officials prepare for peace talks with Russia in Saudi Arabia later this week.
The announcement of these talks caused significant reaction in European capitals after President Trump’s Ukraine envoy, Keith Kellogg, confirmed that neither Ukraine nor European nations would participate. European leaders quickly protested, prompting Secretary of State Marco Rubio to assure them they would be included in the “real negotiations.”
A potential peace deal in Ukraine could lead to the lifting of Western sanctions on Russia, which would theoretically increase global oil supply from Russia. However, this outcome remains uncertain. The European Union has repeatedly indicated over the past three years that it intends to continue restricting Russian energy exports, even if a peace agreement is reached.
U.S. sanctions against Russia would also likely remain in place for some time, should a deal be made, which further complicates the situation. This uncertainty has not yet been fully considered by traders, who appear to believe that peace would lead to a greater Russian oil supply, contributing to the current price drop. It is possible that prices could continue to fall throughout the week.
“Markets are down on the prospect of a Russia-Ukraine ceasefire and potential sanction relief on Moscow,” said Hirouyki Kikugawa, president of NS Trading, to Reuters. He also pointed to concerns about an economic slowdown due to tariff wars, driven by President Trump’s actions. Kikugawa suggested that prices could drop below $70, which would impact drilling plans in the U.S.
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