Global oil prices extended losses early Tuesday following reports that Ukraine has largely agreed to a peace deal with Russia, however leaving only “minor details” to be finalised.
As of 8:35 a.m. ET, U.S. benchmark crude futures, WTI Crude, dropped by 1.29%, slipping further below $60/barrel to $58.08.
The international benchmark, Brent Crude, was also down by 1.23% to $62.59.
Market reaction was driven by news that the U.S. plan for peace in Ukraine has gained support from Ukrainian officials, adding pressure to an already oversupplied oil market.
“The Ukrainians have agreed to the peace deal,” a U.S. official told CBS News on Tuesday.
“There are some minor details to be sorted out but they have agreed to a peace deal,” the official added.
Rustem Umerov, Secretary of the National Security and Defense Council of Ukraine, confirmed progress in talks on X, writing:
“We appreciate the productive and constructive meetings held in Geneva between the Ukrainian and U.S. delegations, as well as President Trump’s steadfast efforts to end the war.”
“Our delegations reached a common understanding on the core terms of the agreement discussed in Geneva,” Umerov added.
“We now count on the support of our European partners in our further steps. We look forward to organizing a visit of Ukraine’s President to the US at the earliest suitable date in November to complete final steps and make a deal with President Trump.”
Analysts noted that expectations of eased sanctions on Russia’s energy industry and exports are weighing on oil prices, as traders anticipate potential shifts in global supply.
Early this month, the US government sanctioned two of Russia’s biggest oil companies—Rosneft and Lukoil—adding more pressure on the Kremlin to return to the peace table.
These companies were given until November 21 to sell their foreign assets but have yet to do so.
Gunvor Group’s attempt to buy Lukoil’s foreign assets for $22bn has now been called off after the US Treasury Department alleged the Swiss firm of having ties with the Kremlin. Gunvor has denied the claims.
While Ukrainian and U.S. delegations met in Geneva, U.S. Army Secretary Dan Driscoll was in Abu Dhabi for discussions with Russian officials, sources told CBS News.
However, Russia has not issued any reaction or comment as of early Tuesday on the reported peace deal.