Ukraine/Washington Peace Talks Cause Modest Oil Price Boost, But Outcomes Unclear

Analysts now await a proposed meeting between Russia,Ukraine, and the U.S.: File Image/Pixabay

Oil on Monday eked out modest gains in the aftermath of peace talks between U.S. president Donald Trump and Russian president Vladimir Putin, and as separate talks between Trump and Ukraine president Volodymyr Zelensky produced mixed sentiment among analysts.

Brent settled up 75 cents, or 1.14 percent, at $66.60 per barrel, and West Texas Intermediate settled up 62 cents, or 0.99 percent, at $63.42 per barrel.

While many observers remarked on the positive sentiment displayed by Trump and Zelensky on Monday, Trump's vow that Ukraine would be protected by a European-led peacekeeping force if it agreed to a land swap deal with Russia was met with criticism on two fronts: first by Trump supporters, who rejected his promise that the U.S. would contribute forces, and second by the Russian Foreign Ministry, which rejected any NATO-style peacekeeping altogether.

Monday's meeting ended with the hope that a trilateral meeting with Putin, Zelensky and Trump would soon follow, and this prompted Giovanni Staunovo, analyst  at UBS, to remark, "I don't try to speculate on the outcome; now the market's focus is whether a date for the trilateral meeting will be announced."

Meanwhile, the White House reiterated that India's continued purchase of Russian crude was helping to fund the war against Ukraine and must stop; Priyanka Sachdeva, senior market analyst at Phillip Nova, said that this, "paired with postponed trade talks, revive concerns that energy flows remain hostage to trade and diplomatic frictions, even as peace prospects in Ukraine brighten."

Meanwhile, focus was also directed at Federal Reserve chair Jerome Powell's annual speech at the central bank's Jackson Hole summit; according to CME's FedWatch tool, Fed funds futures are pricing in an 83 percent likelihood that Powell will cut rates at its September policy meeting, which could lead to a stimulus of oil demand growth.

In other oil news on Monday, customs data cited by media showed that China exported in July the highest volume of refined petroleum products since June 2024: total oil product shipments, including gasoline, diesel, aviation fuel, and marine fuel, increased to 5.34 million tons in July, up by 7.1 percent compared to a year earlier.

Higher refinery runs in China in June and July resulted in increased crude throughput and exports of fuels.