Oil steadies as Trump–Putin meeting looms over Ukraine conflict and sanctions

As traders look ahead to a high-stakes meeting between US President Donald Trump and Russian President Vladimir Putin on Friday, a diplomatic encounter that could reshape the outlook for sanctions on Russian crude, oil markets were steady. West Texas Intermediate (WTI) traded near $63 a barrel after slipping 1.2 per cent in the previous session, while Brent closed just below $66, according to Bloomberg. The drop came in thin trading, with investors waiting for geopolitical cues from the upcoming Alaska summit, where Ukraine’s conflict is expected to dominate the agenda.

Why the Trump–Putin talks matter for oil?

An easing of US sanctions on OPEC+ member Russia could reportedly release more supply into the market, a development that traders are watching closely. Any such move could add to an already bearish supply picture, as global output is ramping up despite concerns about slowing demand due to US tariff pressures on the world economy.

The US Department of Energy (DOE), as reported by Bloomberg, has revised up its 2025 global oversupply forecast to 1.7 million barrels per day. The International Energy Agency (IEA) will release its own estimates later on Wednesday. OPEC, meanwhile, has kept its more bullish view, predicting a tighter oil market next year than previously projected.

US stockpiles rise, demand season nears its end

Whereas, data from the American Petroleum Institute (API), cited by Reuters, showed US crude inventories rising by 1.52 million barrels last week. Gasoline stocks fell, but distillate inventories used for diesel and heating oil gained slightly. Analysts polled by Reuters expect the US Energy Information Administration (EIA) to show a smaller crude drawdown of about 300,000 barrels in its official data later Wednesday, suggesting that the summer driving season may have already peaked. This seasonal demand window usually runs from Memorial Day in late May to Labour Day in early September.

According to Reuters, the EIA projects US crude output will hit a record 13.41 million barrels per day in 2025, thanks to higher well productivity. However, it expects a decline in 2026 as lower oil prices prompt reduced drilling. OPEC’s latest monthly report, as quoted by Reuters, raises its 2026 global demand growth forecast to 1.38 million barrels per day, an increase of 100,000 bpd from its previous projection, while keeping its 2025 demand estimate unchanged.

The White House, as reported by Reuters, has already signalled that a quick Ukraine ceasefire is unlikely, meaning sanctions relief for Russia may not be imminent. Still, ANZ senior commodity strategist Daniel Hynes told Reuters that traders appear less convinced about the possibility of fresh sanctions, even though President Trump has downplayed expectations of a breakthrough.

Oil market snapshot

As per Reuters, Brent crude, the global benchmark, inched up to $66.15 a barrel, a modest gain of three cents in early trade. The move comes after a 0.8 per cent drop in the previous session, reflecting market hesitation ahead of the Trump–Putin meeting in Alaska. Whereas, US WTI crude slipped slightly by three cents to $63.14 a barrel, as per Reuters. While the change was marginal, it followed a sharper 1.2 per cent decline a day earlier. Oversupply concerns and a build-up in domestic stockpiles are keeping prices under pressure.

API figures, as cited by Reuters, show US crude inventories rising by 1.52 million barrels last week. This suggests refiners may be cutting back runs as the summer demand season winds down. Gasoline stocks fell, but distillate inventories posted a small gain. Bloomberg reports that the DOE now expects a much larger global surplus in 2025, 1.7 million barrels per day, compared to earlier projections. Without production cuts from OPEC+, this could weigh heavily on prices.

Reuters cites the EIA’s projection that US crude production will reach a record 13.41 million barrels per day in 2025, boosted by well productivity gains, before easing in 2026. OPEC’s latest monthly report, as quoted by Reuters, raises its 2026 global oil demand growth forecast to 1.38 million barrels per day, driven by Asia and emerging markets, while demand growth in mature economies slows.

Possible price paths after the Trump–Putin meeting

If Trump and Putin agree on steps to lift or soften sanctions on Russian crude, more supply could flow into the global market. According to Bloomberg, this could push Brent prices back toward the low $60s.

If there is no major breakthrough, prices may stay range-bound. As per Reuters analysts, Brent could hold between $63 and $66 as traders continue to price in the current sanctions regime.

If fresh sanctions are imposed, further restricting Russian crude exports, the resulting supply squeeze could push Brent above $70 per barrel, especially if OPEC+ output remains steady, according toReuters.

(With inputs from the agencies)