Oil prices fell by 2% early on Tuesday as hope of a peace deal in Ukraine increased, sending Brent crude below $60 per barrel to the lowest level since May.
As of 9:47 a.m. ET on Tuesday, the front-month Brent Crude futures prices traded down by 2.10% below the $60 per barrel threshold, at $59.29.
The U.S. benchmark, WTI Crude, slipped by 2.22% and traded at $55.56 per barrel by early morning ET.
The U.S. oil price has plunged by 22% year to date and is on track for the worst performance since 2018. Brent, for its part, has lost 20% so far in 2025, marking its worst yearly performance since the pandemic year 2020.
The ongoing talks about a potential peace deal in Ukraine weighed on oil prices after reports of positive discussions and progress made.
Rising optimism over a potential peace deal to end the Russia-Ukraine conflict added to downward pressure as U.S. officials proposed NATO-style security guarantees for Ukraine in talks with Kyiv in Berlin.
U.S. President Donald Trump suggested that the negotiators are “closer now than we have been ever.”
A peace agreement could ease sanctions on Russia’s oil flows and raise supply on an already well-supplied global market.
“Oil markets will be watching developments closely, given the significant supply risk from sanctions on Russia. While Russian seaborne oil exports have held up well since the imposition of sanctions on Rosneft and Lukoil, this oil is still struggling to find buyers,” ING’s commodities strategists Warren Patterson and Ewa Manthey wrote in a note on Tuesday.
“The result is a growing volume of Russian oil at sea. India, a key buyer of Russian oil since the Russia/Ukraine war began, will reportedly see imports of Russian crude fall to around 800k b/d this month, down from around 1.9m b/d in November,” the strategists added.
