Oil market laser focused on Ukraine peace talks
The global oil market continues to closely track the progress of the US-brokered ceasefire plan, aimed at ending the conflict in Ukraine, according to analysts.
IMAGE: Flags of Russia and Ukraine. Getty Images
Brent crude’s price has come under downward pressure after Washington modified its proposed 28-point plan to achieve a ceasefire deal between Kyiv and Moscow.
The earlier plan called on Ukraine to cede territory and cap its military resources as well as renounce plan to join the North Atlantic Treaty Organization (NATO), according to Reuters.
The peace plan also required Russia to immediately pull back its forces from captured Ukrainian territories, Reuters reported.
“[Russia-Ukraine] peace talks remain a crucial area of uncertainty for the market,” two analysts from ING Bank said.
European leaders, however, viewed the proposal as leaning heavily toward Moscow’s interests, prompting calls for a revised version, Reuters added.
The new plan calls for Kyiv to maintain a larger armed force than the 600,000-troop cap outlined in the earlier US plan.
It also suggests that discussions on land exchanges should begin from the current front line, rather than from any predetermined assumptions about which territories should be regarded as Russian.
“The US-proposed peace deal between Russia and Ukraine is facing significant opposition,” remarked ANZ Bank’s senior commodity strategist Daniel Hynes.
Washington has claimed that progress has been made in the ceasefire plan that could potentially bring an end to the Russia-Ukraine war, which is in its third year now.
According to oil market analysts, these developments could pave the way for easing sanctions on Russian crude, adding more barrels to an already oversupplied market.
Last month, Washington increased pressure on Russia by announcing major sanctions on the two oil companies to reduce the country’s oil revenues.
Rosneft and Lukoil together produce more than 5 million b/d of crude, accounting for around 50% of Russia’s total oil output, according to analysts.
“For oil markets, a deal could remove significant supply risk, leaving participants to focus on bearish supply fundamentals through 2026,” ING Bank’s analysts added.
Meanwhile, US President Donald Trump has set a Thursday deadline for Ukrainian counterpart Volodymyr Zelensky to accept the peace deal, while US Secretary of State Marco Rubio said it could be extended further, Reuters reported.
By Aparupa Mazumder
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