Oil prices fell Tuesday following the positive U.S.-Ukraine talks, with the focus now turning to a possible meeting between Ukrainian President Volodymyr Zelensky and Russian President Vladimir Putin in the search for peace.
At 08:15 ET (12:15 GMT), expiring in October fell 0.8% to $66.09 per barrel and declined 0.8% to $62.18 per barrel.
Both contracts rose nearly 1% on Monday after U.S. Trade Adviser Peter Navarro criticized India’s purchases of discounted Russian crude as funding the war, renewing supply flow worries.
Positive Trump-Zelensky meeting
President Donald Trump hosted Ukrainian President Volodymyr Zelensky at the White House on Monday, joined by leaders from major European nations, in a summit aimed at forging pathways toward ending Russia’s war in Ukraine.
In his public remarks, Trump pledged that the U.S. would help guarantee Ukraine’s security as part of any peace settlement, although he did not specify the form or scope of such assurances.
Zelensky welcomed the announcement as “a major step forward.”
“A big sticking point relates to territory,” said analysts at ING, in a note. “Putin wants Ukraine to concede Donetsk and Luhansk in their entirety — even parts of those regions not currently under Russian occupation. Zelensky has made it clear this isn’t something he would accept. We’ll have to wait until such a meeting to know how much flexibility there is on both the Russian and Ukrainian sides.”
Trump said he had begun arranging a meeting between Zelensky and Putin and floated a subsequent three-way discussion, keeping alive hopes for a pathway to negotiations.
European leaders in Washington urged a ceasefire first, while Trump signalled support for Europe-led security guarantees for Kyiv.
“Betting markets aren’t overly convinced that we’ll see a ceasefire before the end of the year. Polymarkets is showing a 38% chance of a ceasefire, well below the peak of 78% seen in March,” ING analysts said.
Markets seek clarity on Trump’s 25% secondary India tariffs
Markets are also worried about 25% additional U.S. tariffs imposed on India for its purchase of Russian oil, set to take effect on August 27.
White House trade adviser Peter Navarro explicitly warned that India must halt its Russian oil trade or face further consequences. Meanwhile, Indian refiners, notably Indian Oil Corp, reaffirmed their intent to continue Russian oil imports if economically viable.
“To make matters worse, trade talks that were set to take place in late August have reportedly been postponed,” ING analysts added.
Investors seek signals from ongoing diplomacy to gauge whether tensions will ease or further escalate.
Source: Investing.com (Ayushman Ojha contributed to this article)