Brent crude fell below $60 a barrel to its lowest level in almost five years as hopes of a Russia-Ukraine peace deal raised expectations of additional oil supply entering an already oversupplied market.
Brent settled nearly 3% lower at $58.92 a barrel, its weakest level since February 2021 during the height of the Covid-19 pandemic.
The decline followed comments from US President Donald Trump, who said a deal to end the war in Ukraine was “closer now than we have ever been”, although European officials cautioned that key territorial issues remain unresolved.
Analysts said any peace agreement could have a significant short-term impact on oil markets by unwinding sanctions-related supply distortions.
“There is a large amount of oil locked up in extended supply chains,” said Martijn Rats, Morgan Stanley’s global commodities strategist.
He added: “If we can get back to historical trading patterns, it is almost like an inventory release,” and said that “definitely tens of millions, maybe a few hundred million barrels could be made available because they are not locked up in these long routes anymore.”
Energy Aspects said it did not expect “a rapid peace deal” but described the negotiations as the biggest geopolitical wild card for oil markets.
The move extends a prolonged downturn for Brent crude, which has now fallen for five consecutive months — its longest losing streak in 11 years — amid rising global production and expectations of a sustained surplus into 2026.