Oil prices fell more than 1% on Tuesday (November 25), after news reports citing a U.S. official said that Ukraine had agreed to a peace agreement.
At the end of the trading session on November 25, Brent crude fell 89 cents (equivalent to 1.4%) to 62.48 USD/barrel. WTI crude lost 89 cents (equivalent to 1.51%) to 57.95 USD/barrel.
ABC News and CBS News reported that a U.S. official said Ukraine had agreed to the terms of a potential peace deal.
A Ukrainian official told Reuters that Kyiv supported the essence of a peace framework following negotiations with the U.S. in Geneva, but some of the most sensitive elements of the framework still need to be discussed between the presidents of the countries involved.
Ukrainian President Volodymyr Zelenskiy may visit the United States in the coming days to finalize the agreement with U.S. President Donald Trump to end the war between Ukraine and Russia, Kyiv’s National Security Director, Rustem Umerov, said.
A peace agreement between Russia and Ukraine could lead to the lifting of sanctions on Moscow, releasing previously restricted oil supplies back into the market.
Both crude oil benchmarks gained 1.3% on November 24, as growing doubts about a peace deal reduced expectations of an unrestricted flow of Russian crude and fuel.
The overall outlook for crude oil supply-demand balance in 2026 is becoming more fragile as many forecasts indicate that supply growth will exceed demand growth next year. Concerns about oversupply have weakened market sentiment recently.
Due to new sanctions on major Russian oil companies Rosneft and Lukoil, along with regulations banning the sale of refined products made from Russian crude to Europe, several Indian refineries have cut purchases of Russian oil, particularly the private firm Reliance.
With limited sales options, Russia is seeking to increase exports to China.
On Tuesday, Russian Deputy Prime Minister Alexander Novak said Moscow and Beijing are discussing options to expand Russia’s oil exports to China.
However, overall, market analysts remain focused on the possibility of a larger supply-demand imbalance.
Deutsche Bank forecasts a crude oil surplus of at least 2 million barrels per day in 2026, with no clear path back to a deficit even by 2027.
The oil market has found some support from rising expectations that the U.S. Federal Reserve (Fed) will cut interest rates at its December 9–10 policy meeting, as Fed members expressed support for such a rate cut.
Lower interest rates could stimulate economic growth and boost oil demand.
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