Could Ukraine–Russia Peace Reopen the Oil Taps?
Oil prices stabilized on Wednesday after falling around 1% in the previous session. Brent futures edged up 0.2% to around $62.05 per barrel, while US WTI also strengthened 0.2% to around $58.38 per barrel. These gains were restrained due to market concerns that supply would exceed demand.
ING analysts believe the oil market is now increasingly entering a glut, although risks from Russian supply remain a concern. Russian oil exports by sea are still quite high, but finding buyers is becoming increasingly difficult. If this situation persists, Russian production is expected to decline due to unavailability.
On the geopolitical front, investors are also monitoring developments in peace efforts between Ukraine and Russia. Ukrainian President Volodymyr Zelenskiy said Ukraine and its European partners will soon submit a "refined document" to the US regarding a peace plan. A series of intense diplomacy in recent days has raised hopes for a breakthrough.
If a peace agreement is reached, some international sanctions on Russian companies could potentially be eased. This could reopen the flow of Russian oil supplies that have been hampered, thereby increasing supply to the global market. This scenario could actually amplify concerns about a medium-term oversupply.
Meanwhile, the US Energy Information Administration (EIA) estimates that US oil production this year will set a new record, higher than previously projected. They raised their 2025 production forecast to an average of 13.61 million barrels per day. However, for 2026, the projection was slightly reduced to 13.53 million barrels per day. This combination of potential additional supply from the US and the possibility of looser Russian oil is causing the oil market to be cautious at the moment, even though prices appear stable on the surface. (asd)
Source: Newsmaker.id
