Quick overview

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Oil prices declined on Tuesday, giving back some of the gains from the previous session as traders balanced signs of progress in peace negotiations to end the war in Ukraine against the potential of more US sanctions on Russia.

The October expiration of Brent Oil Futures fell 0.5 percent to $68.46 per barrel, while West Texas Intermediate (WTI) crude futures dropped 0.6 percent to $64.44 per barrel. Both contracts had risen by nearly 2 percent on Monday amid heightened supply concerns due to Ukrainian drone strikes on Russian gas and oil infrastructure.

Market sentiment remains largely influenced by the situation in Ukraine. Although President Donald Trump has tried to act as a mediator, he threatened last week to impose new sanctions on Moscow if a peace deal cannot be reached within two weeks.

Vice President J. A. Vance claimed that Russia had made “significant concessions,” such as guaranteeing Ukraine’s security, but Western diplomats warned that Moscow had not agreed to a legally binding framework. There is no set date for the trilateral summit that Trump proposed with Russian President Vladimir Putin and Ukrainian President Volodymyr Zelensky.

Fears of a global oil supply surplus have increased with the possibility of a peace agreement, especially if US sanctions on Russian oil are eased afterward. Nonetheless, as hopes for a possible ceasefire between Russia and Ukraine fade, oil prices remain supported, with further US restrictions on Russian oil potentially providing an additional boost.

The United States will begin implementing a 25 percent tariff on Indian goods starting August 27, raising the total tariff to 50 percent. This measure is a response to India’s increasing oil imports from Russia. The tariffs have sparked outrage among Indian officials, who argue that India must protect its vital interests. Several Indian oil processors said they will continue purchasing Russian crude, indicating steady demand that could support global oil prices.