Oil Softens as Peace Talk Plans Emerge

Oil prices edged lower in early Asian trading Tuesday, as markets weighed the possibility of direct peace talks between Russia, Ukraine, and the U.S. that could reshape sanctions on Russian crude.

Brent futures dipped 0.11% to $66.53, while U.S. WTI for September delivery slipped 0.09% to $63.36. The more active October contract eased 0.14% to $62.61. This comes after crude closed about 1% higher in the previous session, highlighting how quickly sentiment is swinging.

Trump announced he had spoken to Putin and begun setting up a trilateral summit with Ukraine’s President Zelenskiy. The news followed meetings with Zelenskiy and European allies in Washington, where Zelenskiy called his talks with Trump “very good.” Many are watching this closely: peace talks could ease sanctions, altering the global oil flow.

TD Securities strategist Bart Melek notes that outcomes diverge sharply: tougher U.S. secondary sanctions on Russia’s oil buyers could push crude back toward recent highs. But a breakthrough that eases tensions might see prices drift lower, with Melek projecting $58 per barrel on average for late 2025 into early 2026.

Despite Monday’s uptick, sentiment is thin. Every headline from Washington, Moscow, or Kyiv is capable of swinging crude in either direction. Many are reluctant to make big bets before clarity emerges on the shape of negotiations.

WTI continues to drift lower, trading just above $63 after failing to hold ground earlier in the month. Price is leaning on the $62.90–$62.50 zone, which has become the key support to watch. A close under $62 would likely shift attention back toward $60, with $55.70 further down as a deeper target. On the topside, resistance around $64.50 is capping any recovery attempts, while the descending trendline adds extra weight above.

Brent is also under pressure, holding near $65.70 and struggling to regain momentum. The first solid floor sits at $64.90, and below that $62.00 comes into play. If sellers push through those levels, a slide toward $58.80 cannot be ruled out. On the upside, the $66.70–$67.00 area is the first hurdle, followed by $68.70 if buyers can manage a stronger bounce.

Both contracts remain heavy, with momentum tilting against the bulls. Unless WTI clears $64.50 or Brent lifts above $67, the path of least resistance looks lower.

Oil traders face a binary setup: peace talk progress could unlock a major supply shift and drag prices lower, while tougher sanctions risk snapping prices higher again. Until the trilateral summit details firm up, crude is likely to stay choppy and headline-driven.