Oil Declines as Zelenskiy Signals Progress in Peace Talks

Summary:

Supplies are also returning to the global market from Venezuela, while Indian refiner Reliance Industries Ltd. has once again purchased Russian crude, with deliveries scheduled to February and March.

Oil fell as Ukrainian President Volodymyr Zelenskiy discussed plans for trilateral meetings with the US and Russia.

West Texas Intermediate traded below $60 a barrel on Thursday. Any breakthrough to end Moscow’s war in Ukraine could iron out supply disruptions and end sanctions on Russian crude in an already oversupplied global market, sapping a longstanding geopolitical risk premium.

Signs of ample supply were evident in a US government report that showed US crude stockpiles rose 3.6 million barrels last week, while fuel stocks rose across the board.

Meanwhile, Kazakhstan is getting closer to ending a weeks-long export constraint as repairs at a key Black Sea oil-loading facility near completion. A backlog of cargoes at the Caspian Pipeline Consortium terminal is easing, though production remains halted at the country’s giant Tengiz oil field.

Supplies are also returning to the global market from Venezuela, while Indian refiner Reliance Industries Ltd. has once again purchased Russian crude, with deliveries scheduled to February and March. Oil Declines as Zelenskiy Signals Progress in Peace Talks_1

Oil Declines as Zelenskiy Signals Progress in Peace Talks_1

Oil ticked higher in the opening weeks of 2026 amid unrest in Iran, a major member of the Organization of the Petroleum Exporting Countries, and interruptions to shipments from Kazakhstan.

Offering something of a floor to prices, the International Energy Agency, which advises major economies, nudged up its estimate for oil demand growth on Wednesday. That will offer some relief for producers, but the agency still maintained its view for a major glut this year.

Crude also saw a boost on Wednesday when US President Donald Trump said he would hold back from imposing tariffs on Europe over Greenland, saying the framework of a potential deal had been reached — averting a potential trade war for now.

“The geopolitical temperature has eased a few degrees,” said Ole Sloth Hansen, a strategist at Saxo Bank A/S in Copenhagen. But with a range of supply threats unresolved, and colder weather set to bolster US demand, prices will likely “hold firm.”

Source: Bloomberg

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