Crude oil prices have dropped to their lowest level in two months, recording a 4% decline over the past week. This fall comes as global markets anticipate a possible breakthrough between US President Donald Trump and Russian President Vladimir Putin at their upcoming summit in Alaska, where the Ukraine war will dominate discussions.
Possible Ukraine Deal Sparks Market Speculation
Trump is set to meet Putin on Friday in Alaska, with reports suggesting he has prepared proposals that could grant Russia control over eastern Ukraine. He has described the plan as a “land swap” aimed at ending the war.
Although Ukrainian President Volodymyr Zelenskyy has firmly rejected the idea of giving up any territory, traders remain optimistic that some form of agreement could emerge. Such a deal could improve the global oil supply situation and bring further relief to prices.
Last week, Brent crude closed near $66 a barrel, down 4.4%, while West Texas Intermediate (WTI) traded above $63, according to Bloomberg data. Analysts warn prices could fall even further if the summit leads to sanctions on Russian oil being lifted.
Analysts Predict Possible Drop Below $60
Robert Rennie, head of commodity and carbon research at Westpac Banking Corp, told Bloomberg that if the war is resolved, “the path for Brent is down below $65 with risks we may see prices below $60 late in the fourth quarter of the year.”
Impact of a Trump-Putin Deal on Oil Markets
If the two leaders strike a deal that results in sanctions on Russian oil being removed, global oil supply would rise, naturally pushing prices lower.
Additionally, the OPEC+ alliance is expected to raise production in the coming months, reversing earlier output cuts. This increase, combined with potential Russian oil flows, could further ease market tightness.
Trump’s trade tariffs could also play a role. His steep 50% tariffs on Indian goods and similar moves against other countries have raised fears of slowing global economic growth. A weaker global economy would mean lower oil demand, putting further downward pressure on prices.
Uncertainty Remains if Talks Fail
However, analysts warn that if negotiations collapse and the war continues, prices could rebound quickly. “The market could quickly pivot to a bullish stance, potentially triggering a sharp rally in oil prices,” said Sugandha Sachdeva, founder of SS WealthStreet, in a comment to Reuters.
She added, “The near-term direction will hinge on several key events, including the August 15 meeting between the US and Russian presidents, upcoming speeches from Federal Reserve officials, and the release of the US CPI data.”
Also Read: Trump Expected to Deploy National Guard Troops to Washington, DC
