Oil prices continued to decline, falling by about 2% after news reports quoted a U.S. official saying that Ukraine had agreed to a peace deal.
Brent crude futures dropped by $1.59, or 2.52%, to $61.77 per barrel at 18:15 GMT. West Texas Intermediate (WTI) fell by $1.60, or 2.1%, to $57.63 per barrel.
ABC and CBS News reported that a U.S. official said Ukraine had agreed to the terms of a potential peace agreement.
A Ukrainian official told Reuters that Kyiv supports the core of the peace framework following talks with the United States in Geneva, but some of the more sensitive issues still need to be discussed between the two presidents.
Kyiv’s National Security Chief, Rustem Umerov, said President Volodymyr Zelensky may visit the United States in the coming days to finalize a deal with President Donald Trump to end the war between Ukraine and Russia.
UBS analyst Giovanni Staunovo noted, “Some media outlets suggest Ukraine has agreed to a peace deal. However, it requires both sides to engage, and it remains unclear whether Russia will also agree.”
He pointed out that a peace agreement between Ukraine and Russia could lead to the lifting of sanctions on Moscow, potentially allowing restricted oil supplies to enter the market.
Oil prices had risen 1.3% on Monday amid growing skepticism about the peace deal, which reduced expectations of unrestricted Russian crude and fuel flows.
The overall outlook for oil supply and demand balance in 2026 appears more pessimistic, with many forecasts predicting supply growth will outpace demand increases next year.
Concerns over oversupply have recently dampened market sentiment.
Due to new sanctions on Russian oil giants Rosneft and Lukoil and regulations banning the sale of refined oil products from Russian crude to Europe, some Indian refiners—especially the private company Reliance—have reduced their purchases of Russian oil.
With limited sales options, Russia is seeking to boost its exports to China.
Russian Deputy Prime Minister Alexander Novak said Tuesday that Moscow and Beijing have discussed ways to expand Russian oil exports to China.
Overall, market analysts remain focused on the potential for broader imbalances between supply and demand.