Oil poised for a weekly loss

WTI crude oil futures dropped more than 2% toward $57 per barrel on Friday, poised for a weekly loss and touching a four-week low, as geopolitical developments stoked fresh concerns about a potential rise in global supply.

The sharp move followed comments from Ukrainian President Volodymyr Zelenskiy, who signaled a willingness to engage in peace negotiations. According to reports, the blueprint—drafted jointly by the US and Russia—is expected to be discussed further during Zelenskiy’s upcoming call with President Donald Trump.

Early details of the proposal suggest it may involve territorial concessions by Ukraine in exchange for a phased lifting of sanctions on Russia. If such an arrangement were to take shape, it could unlock additional Russian crude exports that have been held back by restrictions, prompting fears of a deeper oversupply in an already bearish market.

Still, European diplomats have voiced skepticism, warning that the political and logistical hurdles to any meaningful agreement remain substantial.

Adding to uncertainty, a new wave of US sanctions on Russian oil giants Rosneft and Lukoil comes into force today. The measures are expected to disrupt trade flows immediately, with analysts estimating that up to 48 million barrels of Russian crude could be left stranded at sea as shippers and buyers scramble to interpret and comply with the rules.

The impact is already being felt across Asia. Indian refiners, which have become highly dependent on discounted Russian barrels since 2022, are now rushing to secure alternative supplies from the Middle East, Africa, and Latin America. Their pivot underscores broader concerns about near-term volatility in global crude markets as geopolitical risks, sanctions, and shifting alliances increasingly shape trade patterns.

Overall, with peace-talk speculation raising the possibility of future supply increases and sanctions threatening immediate disruptions, oil markets face a complex mix of bearish and stabilizing forces. For now, the supply-glut narrative continues to dominate, keeping WTI under sustained pressure.