Oil prices rose by almost 3% on Wednesday after peace negotiations between Russia and Ukraine in Geneva concluded abruptly after just two hours, with Ukrainian President Volodymyr Zelenskiy describing the discussions as “difficult.”
Brent crude futures increased by $1.85, or 2.7%, to $69.27 per barrel at 1227 GMT. U.S. West Texas Intermediate crude gained $1.78, or 2.9%, to trade at $64.11 per barrel.
Following the meeting, Zelenskiy accused Russia of intentionally slowing efforts toward ending the four year conflict. Russia’s chief negotiator, Vladimir Medinsky, characterised the talks as challenging but constructive, adding that another round of discussions would be scheduled soon.
The negotiations, mediated by the United States and held in Switzerland, come amid remarks from U.S. President Donald Trump suggesting in recent days that Ukraine bears responsibility for ensuring progress in the peace process.
Separately, Hungary announced it had suspended diesel exports to neighbouring Ukraine and would only resume shipments if crude flows through the Druzhba pipeline to Hungary are restored. Foreign Minister Peter Szijjarto said the decision follows weeks of disrupted Russian oil supplies via Ukraine to Slovakia and Hungary, which Kyiv attributes to a Russian attack in late January.
In a separate development affecting oil markets, prices had fallen on Tuesday after Iran and the United States agreed on “guiding principles” in discussions aimed at resolving their longstanding nuclear dispute. However, Iranian Foreign Minister Abbas Araqchi cautioned that the understanding does not signal an imminent agreement.
At the start of those talks, Iranian state media reported a temporary closure of sections of the Strait of Hormuz, a critical global oil transit route, citing security precautions during military drills by the Revolutionary Guards. Later reports indicated the strait had been closed for several hours, though it was unclear whether it had fully reopened.
Analysts noted that any disruption to oil shipments through the Strait of Hormuz could significantly affect global markets. SEB chief commodities analyst Bjarne Schieldrop said Iran is aware that a sharp spike in oil prices would not align with U.S. interests, particularly amid ongoing negotiations.
Iran and Russia are also scheduled to conduct joint naval exercises in the Sea of Oman and the northern Indian Ocean, shortly after recent military drills in the Strait of Hormuz.
Political risk consultancy Eurasia Group said in a note to clients that it assigns a 65% probability to potential U.S. military strikes against Iran by the end of April.
Market participants are now awaiting weekly inventory data from the American Petroleum Institute and the Energy Information Administration. Analysts expect U.S. crude stockpiles to have increased last week, while distillate and gasoline inventories are projected to have declined.