Oil prices slide as markets eye US–Russia Ukraine peace talks

Oil prices fell in early Asian trade on Monday, extending last week’s sharp losses, as global markets weighed higher US tariffs, an OPEC output increase, and rising hopes for a Ukraine ceasefire deal. Brent crude futures slipped 52 cents, or 0.78 per cent, to $66.07 a barrel by 0041 GMT, while US West Texas Intermediate (WTI) crude dropped 58 cents to $63.30. The decline comes after Brent lost 4.4 per cent and WTI shed 5.1 per cent over the week ended Friday, dragged lower by a gloomy economic outlook, as per Reuters.

Ceasefire hopes and sanctions impact

According to Reuters, expectations have grown that sanctions limiting the supply of Russian oil to global markets could soon be eased. This follows US President Donald Trump’s announcement on Friday that he will meet Russian President Vladimir Putin in Alaska on August 15 to negotiate an end to the Ukraine war.

Trump has warned Moscow that if no peace deal is reached, its oil buyers could face secondary sanctions. At the same time, Washington is pressing India to scale back Russian crude purchases. The White House has also indicated that penalties on Russia could be tightened if talks fail.

Tariffs and inflation risks weigh on demand

The market downturn has also been fuelled by Trump’s new import tariffs, which took effect on Thursday. These duties target dozens of countries and are expected to disrupt supply chains, push up inflation, and slow economic activity.

In parallel, OPEC’s latest output hike has added pressure to crude prices, with the combination of higher supply and weaker demand expectations reinforcing the bearish sentiment.

Key US inflation data ahead

Traders are now focused on US inflation figures due Tuesday, which could influence the Federal Reserve’s interest rate outlook. As quoted by Reuters, IG market analyst Tony Sycamore noted that a weaker-than-expected Consumer Price Index (CPI) reading would boost expectations for earlier and deeper Fed rate cuts, potentially stimulating economic activity and supporting oil demand. Conversely, a hotter print could raise stagflation fears and delay policy easing.

With geopolitical talks and economic data converging this week, oil prices are expected to remain volatile as markets balance hopes of a Ukraine peace pact against the drag from tariffs and output increases.

(With inputs from the agencies)