Oil Traders Bullish On Trump's Russia/Ukraine Peace Efforts, Hopeful On Tariffs

But Innes warns that peace is still theoretical, preventing any price freefall: File Image/Pizabay

Oil on Friday eked out an extremely modest weekly gain but settled lower for the session, as the supply concerns of analysts and traders eased due to U.S. president Donald Trump's vow to broker peace between Russia and Ukraine.

For the week, Brent gained 0.11 percent while West Texas Intermediate lost around 0.37 percent; for Friday, Brent settled down 28 cents at $74.74 per barrel, and WTI settled down 55 cents at $70.74 per barrel.

The geopolitical optimism was kindled by Trump ordering U.S. officials to begin peace talks after Russian president Vladimir Putin and Ukrainian president Volodymyr Zelenskiy told him during phone conversations earlier this week that they wanted the war between them to end.

Traders on Friday caused oil prices to dip in part on the assumption that a peace deal would mean lifting sanctions on Moscow, which in turn would boost global energy supplies.

For the near term, analysts such as Tariq Zahir, managing member at Tyche Capital Advisors, said that risks for oil prices are to the "downside from here," due to Trump's tariff threats being suspended for the time being pending trade negotiations between the U.S. and the various targeted countries, including Canada.

As for supply and demand, Stephen Innes, managing partner at SPI Asset Management, remarked, "Nothing has fundamentally shifted on that front yet."

Innes went on to warn that getting a peace deal between Russia and Ukraine "is far from a slam dunk," so while oil prices may trend lower, "expecting an immediate freefall would be a mistake."

Also on Friday, after U.S. treasury secretary Scott Bessent told media that Washington aims to oil exports from Iran (currently at around 1.6 million barrels per day) to 100,000 bpd, Rebecca Babin, senior energy trader at CIBC Private Wealth Group, said, "The market still discounts the U.S.'s ability to cut flows to 100,000 and further sees potential backfill from [the Organization of the Petroleum Exporting Countries] OPEC.

"Tariff headlines will continue to jar the market as traders try to evaluate impacts on demand."