LONDON, November 21, 2025 – Oil prices fell for a third consecutive session on Friday, with Brent crude down 1.3% to $62.55 a barrel and U.S. West Texas Intermediate (WTI) crude down 1.6% at $58.08, as the United States pushed for a Russia-Ukraine peace deal while global investors remained cautious amid uncertain interest rate expectations. Both benchmarks are on track to record weekly declines of around 3%, erasing gains from the previous week.

Russia-Ukraine Peace Talks Impacting Oil Markets

Market sentiment turned bearish after Washington announced plans to mediate a peace plan between Ukraine and Russia aimed at ending the three-year war. Ukrainian President Volodymyr Zelenskiy confirmed cooperation with the U.S. on the proposed plan.

“News of talks coinciding with U.S. sanctions on Russia’s two largest oil producers provided some relief on supply risks,” said Jim Reid, Managing Director at Deutsche Bank. However, analysts caution that a peace agreement remains uncertain, with Kyiv repeatedly rejecting Russia’s demands.

Sanctions on Russian Oil Companies

U.S. sanctions on Rosneft (ROSN.MM) and Lukoil (LKOH.MM) took effect on Friday, further influencing oil market dynamics. Despite the sanctions, some analysts remain skeptical about their effectiveness in constraining Russian oil supply. Lukoil, for instance, has until December 13 to divest its substantial international portfolio, raising questions about immediate market impacts.

Interest Rates and Dollar Strength

A stronger U.S. dollar added further pressure on oil prices. Investor expectations suggest the Federal Reserve is unlikely to cut interest rates in December, reducing market appetite for riskier assets like oil. According to OANDA analyst Kelvin Wong, the CME FedWatch tool shows the odds of a December rate cut have fallen to 35%, down sharply from around 90% a month ago.

The combination of geopolitical developments, sanctions, and monetary policy uncertainty has created a cautious environment for oil investors, weighing on crude prices despite broader market optimism over potential supply stability.

Conclusion

Oil markets are navigating a complex mix of geopolitical tensions, sanctions on major Russian oil producers, and shifting U.S. monetary policy expectations. While peace talks between Ukraine and Russia could eventually ease supply concerns, analysts warn that market volatility is likely to persist in the near term.