Oil Slips Below $59 After Ukraine Confirms Review of Draft Peace Plan
Oil traded below $59 after President Zelenskiy said Ukraine will review a draft peace plan prepared with input from the US and Russia. The update raised questions about future crude supply and came ahead of new US sanctions on Rosneft and Lukoil.
Oil prices fell on Thursday after Ukrainian President Volodymyr Zelenskiy said he would review a draft peace plan prepared with input from the US and Russia.
West Texas Intermediate dropped as much as 1%, moving below $59 a barrel, shortly after Zelenskiy spoke in Kyiv following a meeting with senior US military officials.
Traders said a credible peace framework could eventually open the door to the removal of sanctions on Russian crude. Russia is the world’s third-largest oil producer, and any return of its restricted barrels would add to supplies at a time when the market is already facing the prospect of a surplus. Output from OPEC+ members and several non-OPEC producers has been rising, and crude is on track for a yearly decline.
The renewed diplomatic activity comes just hours before new US sanctions targeting Rosneft PJSC and Lukoil PJSC, Russia’s two biggest oil companies, are scheduled to take effect.
Peace Deal Still Uncertain
Despite the movement around negotiations, a breakthrough remains unclear.
According to a person familiar with the talks, the US has urged Zelenskiy to consider the draft plan, which includes conditions that mirror long-standing Russian demands. Kyiv has repeatedly rejected those terms, saying they go beyond what Ukraine is willing to concede.
Rachel Ziemba, an adjunct senior fellow at the Center for a New American Security, said Ukraine continues to show willingness to discuss an end to the war, but Russia’s intentions remain uncertain.
“It is unclear whether Russia wants to end the fighting or is looking for more time before harsher sanctions take effect,” she said.
Market Reaction Before Sanctions Deadline
Earlier on Thursday, crude prices briefly moved higher as traders prepared for the impact of the incoming sanctions. Those restrictions have already disrupted some trade flows, especially shipments heading to India, and forced Lukoil to look for buyers for several of its foreign operations.
The market is now watching both the sanctions deadline and any developments tied to the peace discussions, with traders assessing how each could shape global supply in the coming weeks.
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