Oil prices dropped on Friday as markets braced for a high-stakes meeting between U.S. President Donald Trump and Russian leader Vladimir Putin in Alaska, where discussions on a Ukraine ceasefire could influence global supply. Brent crude fell 0.8% to $66.34 a barrel, while U.S. West Texas Intermediate (WTI) slid 0.9% to $63.39. Traders are weighing whether the talks could lead to sanctions relief for Russia, potentially boosting its oil exports.
Analysts caution that even if a ceasefire deal is reached, sanctions easing would require U.S. Congressional approval, delaying any immediate market impact. Giovanni Staunovo, UBS commodity analyst, noted, “The market is watching for de-escalation—any ceasefire could mean more Russian oil, but sanctions removal won’t be quick.” Meanwhile, Trump has threatened secondary sanctions on nations buying Russian oil if peace efforts stall.
Weak Chinese economic data further pressured prices, as factory output growth hit eight-month low and retail sales slowed, raising demand concerns. Though Chinese refinery throughput rose 8.9% year-on-year in July, weaker domestic consumption led to higher fuel exports.
Adding to bearish sentiment, Bank of America widened its forecast for an oil surplus, projecting an average excess of 890,000 barrels per day from mid-2025, citing rising OPEC+ supply. The International Energy Agency also warned of a “bloated” market, reinforcing worries of prolonged oversupply.
For the week, WTI was down 0.7%, while Brent edged up 0.4%, reflecting mixed reactions to geopolitical and economic signals.