By: Economy Middle east

Oil prices climbed on Monday as markets assessed the results of discussions between the U.S. and Ukrainian presidents over a possible agreement to end the war in Ukraine, alongside ongoing Middle East tensions that could threaten oil supplies.

As of 6:09 GMT, Brent crude futures rose 76 cents, or 1.25 percent, to $61.40 a barrel, while U.S. West Texas Intermediate crude rose 71 cents, or 1.25 percent, to $57.43 a barrel.

Both benchmark prices dropped by more than 2 percent on Friday as investors considered the prospect of a global supply surplus and the potential for a peace agreement in Ukraine ahead of weekend talks between Ukrainian President Volodymyr Zelenskiy and U.S. President Donald Trump.

Trump-Zelenskiy talks signal progress towards peace agreement

Market sentiment was rattled on Friday as renewed diplomatic signals fueled expectations of a possible end to the nearly three-year-long war.

Trump said on Sunday that he and the Ukrainian President were making significant progress toward an agreement to end the war in Ukraine, though he noted that the future of the contested Donbas region remains unresolved.

The remarks came during a joint press conference held late on Sunday following talks at Trump’s Mar-a-Lago resort in Florida. Trump said it should become clear in a few weeks whether efforts to reach a peace deal will be successful.

However, the negotiations failed to resolve territorial disputes, suggesting that a Russia–Ukraine peace agreement could remain stalled without an imminent breakthrough.

Trump’s remarks came after a series of U.S.-led diplomatic efforts to secure a ceasefire. The absence of tangible progress helped oil prices stabilize on Monday, as traders concluded that a quick resolution and a rapid return of sanctioned Russian supplies were still far from certain.

Any meaningful peace agreement could ultimately put downward pressure on oil prices by easing the geopolitical risk premium that has underpinned the market since Russia’s invasion of Ukraine.

Possible supply surplus limits gains in oil prices

Oil prices are also being supported by persistent geopolitical tensions, with Russia and Ukraine continuing to target each other’s energy infrastructure over the weekend.

That support, however, has been tempered by mounting concerns over a possible supply surplus. Leading forecasting agencies and analysts have cautioned that global oil supply may outstrip demand in 2026, as output from non-OPEC producers increases and consumption growth slows.

Oil prices have also drawn recent support from heightened tensions between the United States and Venezuela. Washington has intensified pressure on Venezuelan crude exports, including actions aimed at shipments and buyers, restricting supply from the OPEC member.

WTI is expected to trade in a $55–$60 range, with markets also monitoring U.S. enforcement measures targeting Venezuelan oil shipments and potential repercussions from a U.S. military strike on ISIS targets in Nigeria, which produces around 1.5 million barrels per day, IG analyst Tony Sycamore said in a note.