Oil falls as Ukraine peace talks move closer to breakthrough

Oil prices slipped on Monday, extending last week’s losses, as progress in Russia-Ukraine peace talks and a stronger U.S. dollar pressured the market.

Brent crude futures dipped 14 cents, or 0.22%, to $62.42 a barrel at 0148 GMT, while West Texas Intermediate fell 15 cents, or 0.26%, to $57.91. Both benchmarks declined about 3% last week, hitting their lowest closes since October 21, amid concerns that a peace agreement could lead to lifted sanctions and a surge of Russian oil returning to global markets.

“The sell-off was triggered mainly by President Trump’s forceful push for a Russia-Ukraine peace deal, which markets see as a fast track to unlocking substantial Russian supply,” IG analyst Tony Sycamore said in a note.

He added that momentum toward a deal overshadowed the immediate disruption from new U.S. sanctions on Rosneft and Lukoil that took effect Friday, stranding nearly 48 million barrels of Russian crude at sea.

On Sunday, U.S. and Ukrainian officials reported progress on a peace proposal that would require Ukraine to cede territory and scale back plans to join NATO. President Donald Trump has set a Thursday deadline, though European leaders are pushing for revisions.

A peace agreement could ease restrictions that have limited Russian oil exports. Russia was the world’s second-largest crude producer in 2024, according to the U.S. Energy Information Administration.

Concerns about increased supply, along with uncertainty over potential U.S. interest rate cuts, have weighed on investor sentiment. However, expectations for a rate cut rose after New York Federal Reserve President John Williams signaled the possibility of action “in the near term.”

The U.S. dollar was on track for its strongest weekly gain in six weeks, with the dollar index reaching its highest level since late May — a development that makes oil more expensive for buyers using other currencies.