Oil markets are expected to show little movement when trading resumes on Sunday following U.S. President Donald Trump’s meeting with Russian President Vladimir Putin in Alaska.
Trump said the two leaders agreed that the focus should be on reaching a full peace deal for Ukraine rather than pursuing a ceasefire, which Kyiv and its European allies, until now backed by Washington, have been pushing for.
Trump also announced he would delay imposing tariffs on countries such as China that buy Russian oil after his talks with Putin.
He had previously threatened sanctions on Moscow and secondary sanctions on buyers, including China and India, if no progress was made toward ending the war in Ukraine.
“This will mean Russian oil will continue to flow undisturbed and this should be bearish for oil prices,” said Ajay Parmar, an analyst at ICIS. “It is worth noting that we think the impact of this will be minimal though and prices will likely see only a small dip in the very near term as a result of this news.”
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Markets are now looking ahead to a meeting in Washington on Monday between Trump and Ukrainian President Volodymyr Zelenskiy.
European leaders have also been invited, according to a source familiar with the matter.
“Market participants will track comments from European leaders but for now Russian supply disruption risks will remain contained,” said Giovanni Staunovo, analyst at UBS, according to Reuters.
Before the Alaska talks, Brent crude settled at $65.85 a barrel on Friday and U.S. West Texas Intermediate at $62.80, with both benchmarks falling nearly $1.
Traders say prices are likely to remain range-bound until a deal is reached.
“What we do know is that the threat of immediate sanctions on Russia, or secondary sanctions on other countries is put on hold for now, which would be bearish,” said Phil Flynn, senior analyst at Price Futures Group.
Russia has redirected much of its oil flows to China and India since Western sanctions were imposed, including a seaborne embargo and price caps on its crude.
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Image Credit: ABC
