Trump-Putin Meeting in Alaska Triggers Oil Price Decline Amid Fears of Easing Sanctions and Rising Supplies

Oil prices fell ahead of Trump-Putin talks, with Brent crude down 1.3% and WTI down 1.5%. The market awaits a ceasefire in Ukraine, which could lead to an easing of sanctions on Russia. Weaker economic data from China also weighed on sentiment, raising concerns over fuel demand. Forecasts of a growing oil market surplus and higher US interest rates also contributed to the decline.

Oil prices fell on Friday as traders awaited talks between U.S. President Donald Trump and Russian leader Vladimir Putin, which some expect could lead to an easing of the sanctions imposed on Moscow over the Ukraine war. Brent crude futures fell 50 cents, or 0.8%, to $66.34 a barrel by 0923 GMT, while U.S. West Texas Intermediate crude futures declined 57 cents, or 0.9%, to $63.39 [1].

At Friday's meeting between Trump and Putin in Alaska, a ceasefire in the Ukraine is at the top of the agenda. Trump has said he believes Russia is prepared to end the war in Ukraine. However, he is also threatening to impose secondary sanctions on countries that buy Moscow's oil if the peace talks don't advance. Giovanni Staunovo, commodity analyst at UBS, said, "The market is watching out for whether there is a ceasefire or not. An expectation of a ceasefire translates into more Russian production. The question is will there be escalation or de-escalation?" [1].

Even if there is a deal, it would likely take longer to ease sanctions on Russia because that would have to go through the U.S. Congress, Staunovo said. For the week, WTI is set to drop 0.7% while Brent is set to rise 0.4% [1].

Weaker economic data from China also weighed on sentiment, raising concerns over fuel demand. Chinese government data showed factory output growth slumped to an eight-month low and retail sales growth expanded at its slowest pace since December, despite stronger oil throughput in the world's second-largest crude user [1].

Forecasts of a growing oil market surplus also weighed on sentiment, as did the prospect of higher-for-longer U.S. interest rates. Bank of America analysts said they were widening their forecast for the oil market surplus, citing growing supplies from OPEC+ [2].

References:
[1] https://www.reuters.com/business/energy/oil-falls-ahead-trump-putin-summit-alaska-2025-08-15/
[2] https://www.reuters.com/business/energy/oil-prices-fall-1-after-us-crude-build-ahead-trump-putin-talks-2025-08-13/