A crude oil price decline that started last week extended today with a fresh dip for the benchmarks amid multiplying signs that the end of the war in Ukraine may well be on the way.

Brent crude was trading at $74.77 per barrel at the time of writing, and West Texas Intermediate was changing hands for $70.68 per barrel as top U.S. officials prepare for peace talks with Russia this week in Saudi Arabia.

The talks caused quite a stir in European capitals after President Trump’s Ukraine envoy Keith Kellogg declared flatly that neither the Ukraine nor European countries would take part in the peace talks. Following an outcry from European leaders, Secretary of State Marco Rubio stepped in and assured them that they would be invited to the “real negotiations.”

A peace deal in the Ukraine could lead to the lifting of Western sanctions on Russia, which would in turn boost the availability of Russian oil supply internationally—but only theoretically. The European Union has signaled on a regular basis over the past three years it is willing to keep squeezing Russian energy as much as it possibly could and it’s quite likely the squeeze will continue even after a peace deal is signed—if that happens.

U.S. sanctions against Moscow will also hardly be lifted straight away, again, if a deal is reached at all, which is far from certain. This has yet to be factored into traders’ decisions, which currently appear to be based on the perception that peace would equal more Russian oil on international markets, hence the dip. Chances are that this dip will extend further during this week.

Source: OILPRICE