Brent moves lower as market eyes Ukraine peace talks

The front-month ICE Brent contract has declined by $0.36/bbl on the day from Friday, to trade at $62.20/bbl at 09.00 GMT.

IMAGE: Getty Images

Upward pressure:

Oil prices have found some support on the back of “significant uncertainty” over the impact of recently imposed sanctions on Russian oil producers Rosneft and Lukoil, according to market analysts.

Last month, Washington increased pressure on Russia by imposing major sanctions on the two oil companies in an effort to reduce the country’s oil revenues.

Rosneft and Lukoil together produce more than 5 million b/d of crude, accounting for around 50% of Russia’s total oil output, according to analysts.

“Both sanctions [on Rosneft and Lukoil] and continued Ukrainian drone attacks on Russian refiners have led to plenty of supply worries [in the market],” two analysts from ING Bank said.

Downward pressure:

Brent crude’s price has come under renewed downward pressure amid ongoing peace talks to end the conflict in Ukraine.

The US administration has claimed that progress has been made in the 28-point plan that could potentially bring an end to the Russia-Ukraine war, which is in its third year now, according to a Reuters report.

“Ongoing talks to reach a Russia-Ukraine peace deal are weighing on the market,” ING Bank’s analysts said.

US President Donald Trump has set a Thursday deadline for Ukrainian counterpart Volodymyr Zelensky to accept the peace deal, while US Secretary of State Marco Rubio said it could be extended further, Reuters reported.

“Developments related to a potential peace agreement are important for the oil market,” ING Bank’s analysts added.

By Aparupa Mazumder

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