Global oil prices fell sharply on Tuesday, with Brent crude slipping below the $60-per-barrel mark for the first time since May, as optimism over potential peace talks between Russia and Ukraine combined with persistent oversupply to pressure markets.
Brent crude futures declined 2.6% to $59.06 per barrel, while U.S. West Texas Intermediate (WTI) dropped 2.5% to $55.32 per barrel.
The latest decline followed comments by former U.S. President Donald Trump, who said on Monday that a peace agreement between Russia and Ukraine was “closer than ever.”
Markets interpreted the remarks as raising the possibility of reduced geopolitical risk and, potentially, an easing of sanctions on Russian oil exports.
According to the U.S. Energy Information Administration (EIA), the global oil market has remained in surplus since the beginning of the year, driven largely by increased production in the United States and the Middle East.
2026 Forecast
The EIA forecasts that U.S. crude prices will average $54 per barrel in the first quarter of 2026 and around $55 per barrel for the full year, reflecting expectations of continued supply pressure.
Major Wall Street banks have also turned more cautious on oil. Last month, commodities analysts at JPMorgan and Goldman Sachs revised down their oil price forecasts for 2026 and 2027, citing sustained oversupply and weaker demand growth.
Oil prices are now on track for their worst annual performance since 2018, with a decline of more than 20% so far this year. The downturn has been worsened by production increases earlier in the year by the Organisation of Petroleum Exporting Countries (OPEC), despite ongoing efforts to manage global supply. At the same time, Russia despite Western sanctions has continued exporting crude, selling at discounted prices to major buyers such as India and China.
Any potential lifting of U.S. sanctions on Russian oil could further flood the market, given that Russia remains the world’s third-largest oil producer.
