Oil Prices Slide Again Amid U.S.-Led Push for Russia–Ukraine Peace Deal

Oil Prices Slide Again Amid U.S.-Led Push for Russia–Ukraine Peace Deal

Oil markets fell for the third day in a row on Friday, as optimism over a potential U.S.-brokered peace agreement between Russia and Ukraine dampened risk premiums — while a stronger dollar and uncertainty about U.S. interest rate cuts added to the downside.

By mid‑morning in London, Brent crude futures had fallen roughly 1.6% to $62.36 per barrel, while U.S. West Texas Intermediate (WTI) dropped about 1.9%, trading around $57.90.

What’s Driving the Decline

Peace Deal Prospects
The U.S. is actively pushing for a peace plan between Russia and Ukraine — a development that could unlock greater Russian oil exports.

Ukrainian President Volodymyr Zelenskiy has expressed willingness to work with Washington on a “plan to end the war.”

Markets interpret this as a potential easing of supply risk, reducing the geopolitical premium that has supported oil prices.
Business Recorder

Sanctions on Russian Oil Companies
At the same time, sanctions on major Russian oil firms — notably Rosneft and Lukoil — are set to take effect.
Reuters

However, some analysts question how effective these restrictions will be. According to ANZ, an agreement between Moscow and Kyiv is still “far from certain,” and doubts remain over how meaningful the sanctions will be.

Lukoil, for example, reportedly has until December 13 to offload its large international portfolio.

Interest Rate Uncertainty
A strong dollar is weighing on oil demand. The U.S. currency is strengthening amid speculation that the Federal Reserve may not cut interest rates soon.

According to OANDA’s Kelvin Wong, the probability of a rate cut in December has dropped to 35%, down from around 90% just a month ago.

That shift makes investors more risk‑averse, and commodities like oil often suffer in such environments.

Market Implications

If peace talks succeed, global oil supply could increase, putting further downward pressure on prices.

Even with sanctions, growth in Russian exports might offset the restrictions, depending on how effectively buyers circumvent them.

The shift in rate expectations could further weaken demand, especially from global markets sensitive to dollar strength.

Key Quotes & Analysis

Jim Reid, Managing Director at Deutsche Bank, noted that the timing of peace-talk news — just as U.S. sanctions kick in — provided “some relief on risks to Russian oil supply.”

But ANZ analysts cautioned that a deal is “far from certain,” especially since Kyiv has repeatedly rejected some of Russia’s terms.