Oil Holds Losses as Trump Flags Russian Talks to End Ukraine War

Oil prices held losses on Wednesday as U.S. President Donald Trump hinted at potential peace negotiations to end the war in Ukraine. The West Texas Intermediate light crude, as tracked by the United States Oil Fund (USO), tumbled by 2.7% by 3:10 p.m. ET in New York, heading for its worst session since late November 2024. Trump posted on Truth Social that he had "a lengthy and highly productive" conversation with Russian President Vladimir Putin, with the two leaders discussing "Ukraine, the Middle East, Energy, Artificial Intelligence, the power of the Dollar, and various other subjects." Trump added that he had directed his top officials, including Secretary of State Marco Rubio, CIA Director John Ratcliffe, National Security Advisor Michael Waltz, and Ambassador and Special Envoy Steve Witkoff to lead negotiations. Putin reportedly responded positively to the discussions and expressed willingness to cooperate.



This decision follows a high-profile prisoner exchange between Washington and Moscow. On Tuesday, Russia released American teacher Marc Fogel after three years of detention, while the U.S. freed Russian cybercriminal Alexander Vinnik. Read Also: Trump Administration Secures Release Of Cannabis Prisoner Marc Fogel From 14-Year Russian Sentence What's Next For Ukraine And NATO? The reaction from Kyiv remains cautious. Ukrainian President Volodymyr Zelenskyy also confirmed he had a "meaningful" conversation with Trump following the talks the U.S. President had with Putin. "No one wants peace more than Ukraine. Together with the U.S., we are charting our next steps to stop Russian aggression and ensure a lasting, reliable peace," Zelenskyy stated. The Ukrainian leader highlighted that Ukraine remains committed to defending its sovereignty. Zelenskyy also met with Secretary of Security Scott Bessent, marking Bessent's first international visit. The two discussed preparing a new document outlining security, economic cooperation, and resource partnerships. Zelenskyy stressed the importance of preventing Moscow and its allies from gaining control over Ukraine and underscored the need for unified action across the free world. "We expect to make progress by the Munich Security Conference," Zelenskyy said.

Stock Market Reactions Investors viewed the move as a sign of easing geopolitical tensions and a possible decrease in U.S. government spending on defense contractors. The Energy Select Sector SPDR Fund (XLE), representing major U.S. energy companies, tumbled by 2.24% on Wednesday, weighed down by lower oil prices. Shares of major U.S. defense contractors experienced marginal declines amid expectations of reduced defense spending following the potential de-escalation in Ukraine. Lockheed Martin Corp. (LMT) was down by 1.4% to $443.30, Northrop Grumman Corp. (NOC) eased by 0.5% to $471.70, and General Dynamics Corp. (GD) dropped by 1.86% to $252.21. Read now: Inflation Runs Hot In January: ‘Houston, We Have A Problem,’ Experts Warn

Photo: Shutterstock GD General Dynamics Corp $251.33 -2.20% Overview Rating: Speculative 50% Technicals Analysis 660100 Financials Analysis 400100 Watchlist Overview © 2025 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

In conclusion, the potential resolution of the Russia-Ukraine conflict, as hinted by Trump's talks with Putin, could have significant impacts on global oil supply and demand dynamics in both the short and long term. In the short term, a resolution could lead to an increase in global oil supply, as Russia is a major oil producer and exporter. In the long term, a resolution to the conflict could have broader implications for global oil supply and demand dynamics, as low carbon emission reduction becomes a global theme and geopolitical unrest is frequent. However, the actual impact on global oil supply and demand dynamics will depend on the specific terms of the peace deal and the timeline for the resolution of the conflict. The study also highlights that the growth of global oil supply is expected to slow down due to factors such as the difficulty in recovering US crude oil production significantly and the aging of oil fields leading to accelerated production decline. These factors could offset some of the potential supply increases from a resolution to the Russia-Ukraine conflict.