Brent gains as Russia-Ukraine ceasefire hopes fall through

The front-month ICE Brent contract has gained by $0.63/bbl on the day, to trade at $68.20/bbl at 09.00 GMT.

IMAGE: Getty Images

Upward pressure:

Brent’s price has gained as hopes for a ceasefire deal between Russia and Ukraine seem to diminish.

German Chancellor Friedrich Merz said a long-anticipated meeting between Russian President Vladimir Putin and Ukrainian counterpart Volodymyr Zelensky will not take place.

The Putin-Zelensky meeting was “seen as a crucial step towards such a [ceasefire] deal,” remarked ANZ Bank’s senior commodity strategist Daniel Hynes. “That decreases the likelihood of more Russian supplies reaching broader markets,” he added.

Merz’s remarks come as shelling intensifies on both sides. Russia launched a fresh wave of strikes on Kyiv, hitting buildings that house the EU mission and the British Council.

Meanwhile, Ukrainian drone attacks have reduced Russia’s refining capacity by 17%, or about 1.2 million b/d in August, Reuters reports. “Ukrainian drone strikes on Russia’s oil export pipelines appear to be hitting Moscow’s crude oil flows,” Hynes said.

Downward pressure:

Brent’s price has come under some pressure this week after Washington imposed 50% tariffs on imports of Indian goods.

India currently faces tariffs on all exports to the US because of its continued purchases of Russian crude oil.

Market participants fear the tariffs could strain US-India trade relations, a crucial partnership, and weigh on the broader commodities market.

“White House trade advisor, Peter Navaro, stepped up pressure on India to halt purchases of Russian crude, repeating accusations that New Delhi is funding the Kremlin’s campaign in Ukraine,” Hynes commented.

By Aparupa Mazumder

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