Peace Moves Closer, Global Oil Prices Rise Sharply!
Global oil prices weakened after Ukrainian President Volodymyr Zelenskiy agreed to begin work on a peace plan, while US sanctions against two Russian oil giants, Rosneft and Lukoil, officially took effect on Friday. Brent fell for a third day and traded below $63 per barrel, while WTI hovered near $58 per barrel. The peace plan drafted by the US and Russia reportedly includes the possibility of Ukraine ceding territory and sanctions relief, although European diplomats remain skeptical, noting that Russia often appears cooperative under pressure.
If peace talks do progress and sanctions are lifted, the market could be flooded with additional supply amid projections of a large surplus next year. OPEC+ and other producers, particularly those from the US, have already increased production, fueling bearish sentiment and putting oil prices on track for an annual decline. However, some analysts believe the current market reaction is more of a knee-jerk, a short-term knee-jerk response, than a truly permanent change in trend.
On the other hand, the newly imposed sanctions could leave nearly 48 million barrels of Russian oil stranded at sea due to market difficulties. Indian refineries that have relied on cheap Russian oil are now looking for alternative sources; Reliance Industries even plans to stop processing some Russian oil at its Jamnagar refinery. In recent trading, Brent crude for January fell around 1.4% to $62.50 per barrel, while WTI crude for January fell 1.6% to $58.07 per barrel.
Source: Newsmaker.id
