Oil prices fell on Tuesday as hopes for a potential resolution to the Russia-Ukraine conflict raised expectations of increased crude supply. Brent crude dropped 82 cents, or 1.23%, to $65.78 per barrel, while U.S. West Texas Intermediate (WTI) for September delivery fell 86 cents, or 1.36%, to $62.56 per barrel. The more active October WTI contract slipped 82 cents, or 1.31%, to $61.88 per barrel.

Traders are responding to ongoing discussions involving Russia, Ukraine, and the U.S., which could eventually lead to a lifting of sanctions on Russian oil. These developments come after a White House meeting on Monday, where former U.S. President Donald Trump met with Ukrainian President Volodymyr Zelenskiy and several European leaders. Trump later confirmed he had spoken with Russian President Vladimir Putin about arranging a trilateral summit with Zelenskiy.

Commerzbank analysts said the talks have reignited optimism about a possible end to the war, which in turn is weighing on oil prices. Similarly, Suvro Sarkar, lead energy analyst at DBS Bank, noted that Trump’s softened stance on secondary sanctions against Russian oil importers has lowered the risk of supply disruptions, easing geopolitical tensions.

Zelenskiy described his discussions with Trump as “very good,” highlighting talks of potential U.S. security guarantees for Ukraine. Trump confirmed that such support would be provided, though details on the scope remain unclear.

Bart Melek, head of commodity strategy at TD Securities, suggested that if tensions continue to ease and sanctions threats recede, oil prices could drift toward $58 per barrel in late 2025 and early 2026.

Reporting by Robert Harvey in London, Anjana Anil in Bengaluru, and Emily Chow in Singapore; Editing by Susan Fenton and Christina Fincher