Oil prices saw a decline on Tuesday as market participants reflected on the upcoming three-way discussions involving Russia, Ukraine, and the U.S. aimed at resolving the conflict in Ukraine, which could potentially result in the lifting of sanctions on Russian crude. Brent crude futures dropped by 40 cents, or 0.62 percent, settling at $66.20 a barrel. Meanwhile, U.S. West Texas Intermediate crude futures for September delivery, which are set to expire on Wednesday, decreased by 15 cents, or 0.22 percent, to $62.27 per barrel. The more actively traded October WTI contract fell 9 cents, or 0.14 percent, to $62.61 a barrel. Prices had closed approximately 1 percent higher in the prior session.
In the wake of discussions with Ukraine President Volodymyr Zelenskiy and a coalition of European allies at the White House on Monday, U.S. President Donald Trump announced via social media that he had spoken with his Russian counterpart Vladimir Putin and initiated plans for a meeting between Putin and Zelenskiy, which would be succeeded by a trilateral summit among the three presidents. Zelenskiy characterized his direct conversations with Trump as “very good” and noted that they had addressed Ukraine’s need for U.S. security guarantees. Trump has advocated for a swift conclusion to Europe’s deadliest conflict in 80 years; however, Kyiv and its allies remain apprehensive that he might attempt to impose an agreement under Russia’s terms.
Read more: Crude oil prices climb to $65.89 as Russia supply concerns cool after Trump-Putin meeting
Projected increase in global oil supply
According to Trading Economics, oil prices have fallen approximately 10 percent this month, pressured by rising supply from OPEC+ as well as trade tensions that are causing demand concerns globally. The International Energy Agency (IEA) reports that global oil supply is expected to increase by 2.5 million barrels per day in 2025, a rise from previous forecasts, largely due to OPEC+’s decision to increase output. However, demand growth forecasts were slightly lowered by the IEA to 680,000 bpd in 2025 amid weaker fuel consumption in key economies, highlighting an increasingly oversupplied market.Â
The Trump administration’s recent temporary shelving of new sanctions and secondary tariffs on Russian oil buyers, such as those initially targeted at India, has also weighed on market sentiment. Energy Intelligence reported that this pivot gives room for possible recalibration of international trade dynamics depending on the outcome of the planned peace talks. Meanwhile, the European Union maintains its commitment to advancing further sanctions against Russia, with a 19th package vote planned for September, aiming to tighten economic pressure until a just peace is achieved.Â
Market analysts have noted that easing geopolitical tensions and the reduction of secondary tariffs could push crude prices down towards an average of $58 per barrel in the last quarter of 2025 and early 2026. Moreover, renewed sanctions or tariff threats would likely drive prices back up to levels seen earlier this year. Refining activity is expected to reach near-record highs with global crude oil refining projected to hit 85.6 million bpd in August 2025, a sign of significant processing capacity amid fluctuating supply and demand dynamics.Â
