Oil prices dropped on Tuesday as traders speculated that a potential cease-fire in Russia’s war with Ukraine could ease sanctions on Russian crude. A rollback of sanctions would boost global supply and weigh on prices.
Brent crude futures fell 50 cents, or 0.75%, to $66.10 a barrel by 10:38 a.m. CDT (1538 GMT). U.S. West Texas Intermediate (WTI) September futures, set to expire Wednesday, slid 72 cents, or 1.14%, to $62.70 a barrel. The more active October WTI contract declined 66 cents, or 1.05%, to $62.04 a barrel.
“Even with the peace optimism, short positions remain at record highs,” said Phil Flynn, senior analyst at Price Futures Group. “If a cease-fire fails to materialize, oil could bounce back quickly.”
The market reacted after President Donald Trump announced he had spoken with Russian President Vladimir Putin following a White House meeting with Ukrainian President Volodymyr Zelensky and European allies. Trump said preparations were underway for a meeting between Putin and Zelensky, which could expand into a trilateral summit.
Analysts noted that Trump’s softer stance on secondary sanctions targeting Russian oil buyers reduced fears of global supply disruptions. This has slightly eased geopolitical tensions.
Meanwhile, Chinese refiners purchased 15 cargoes of Russian oil for October and November, as Indian demand for Moscow’s crude has declined, according to analysts and traders.
Zelensky described his talks with Trump as “very good” and highlighted discussions about U.S. security guarantees for Ukraine. Trump confirmed that the U.S. would provide guarantees, though details remain unclear.
Still, Kyiv and its allies fear Trump could push for a settlement on Russia’s terms.
“If sanctions and tariff threats ease, oil could drift lower toward our $58 per barrel forecast for late 2025 and early 2026,” said Bart Melek, head of commodity strategy at TD Securities.
