Oil prices fell on Tuesday as traders weighed the possibility that talks between Russia, Ukraine and the US to end the war in Ukraine could lead to the lifting of sanctions on Russian crude, raising supply.
Brent crude futures were down 62 cents, or 0.93%, to $65.98 a barrel at 1222 GMT. US West Texas Intermediate crude futures for September delivery, set to expire on Wednesday, were down 66 cents, or 1.04%, to $62.76 per barrel.
The more active October WTI contract was down 63 cents, or 1%, at $62.07 a barrel, Reuters reported.
Following a White House meeting on Monday with Ukrainian President Volodymyr Zelenskiy and European allies, US President Donald Trump announced in a social media post that he had spoken with Russian President Vladimir Putin.
Trump said arrangements were being made for a meeting between Putin and Zelenskiy, which could lead to a trilateral summit involving all three leaders.
"Following yesterday's meeting between Trump, Ukrainian President Zelenskiy, and several European heads of state and government, there appears to be movement in the negotiations, fueling renewed hopes for an upcoming end to the war. As a result, oil prices are falling again today," Commerzbank analysts said in a note.
Suvro Sarkar, lead energy analyst at DBS Bank, said Trump's softened stance on secondary sanctions targeting importers of Russian oil had reduced the risk of global supply disruptions, easing geopolitical tensions slightly.
Chinese refineries have purchased 15 cargoes of Russian oil for October and November delivery as Indian demand for Moscow's exports falls away, two analysts and one trader said on Tuesday.
Zelenskiy described his talks with Trump as "very good" and noted discussions about potential US security guarantees for Ukraine. Trump confirmed the US would provide such guarantees, though the extent of support remains unclear.
Trump has pressed for a quick end to Europe's deadliest war in 80 years, but Kyiv and its allies worry he could seek to force an agreement on Russia's terms.
"An outcome which would see a ratcheting down of tensions and remove threats of secondary tariffs or sanctions would see oil drift lower toward our $58 per barrel Q4-25/Q1-26 average target," Bart Melek, head of commodity strategy at TD Securities, said in a note.
