Brent crude oil price falls below $60 per barrel - first time since Ma

On December 16, oil prices fell to their lowest values since Ma. Traders began to put into quotations the possible impact of a peaceful settlement of the Russian-Ukrainian conflict on the oil market, where a strong supply surplus is already expected in 2026.

In morning trading, Brent futures fell 1.8% to $59.7 per barrel, hitting an intraday low since Ma. 5. The closing price of the benchmark oil grade has not fallen below $60 per barrel since the COVID-19 pandemic. Quotes of U.S. WTI at the end of trading on December 15 were $56.8 per barrel - the lowest since February 2021, writes the Financial Times. At the time of publication of this text January contracts for WTI were trading at $55.7, having fallen in price by almost 2%.

The British publication attributes the drop in oil prices to US President Donald Trump's statement that a deal to end the military conflict in Ukraine is "closer than ever." New hopes for a peace agreement in Eastern Europe are helping to reduce the long-standing geopolitical premium in oil prices, Bloomberg notes.

Analysts surveyed by the FT believe that any peace agreement on Ukraine will have a significant short-term impact on the oil market by removing logistical distortions caused by sanctions against Russian exports.

"A large volume of oil is trapped in lengthened supply chains," Morgan Stanley commodities strategist Martin Raths stated. Although Russian oil continues to flow into the market despite sanctions, tankers have to travel much longer distances from Russia's western ports to buyers in India or China, he explained. According to Raths, a return to historical trade routes would be "tantamount to releasing reserves" by "tens, maybe even a few hundred" million barrels. At the same time, the strategist warned that markets can get ahead of events, and previously such expectations have proved premature.

Consulting firm Energy Aspects said it did not expect a deal to be finalized quickly, but characterized the negotiation process as a major factor in geopolitical uncertainty, especially during the traditionally low trading liquidity period of the Christmas and New Year holidays.

Brent crude oil Mark has fallen in price for five months in a row - this is the longest streak of decline in 11 years, notes the FT. Since the beginning of 2025 quotations have lost almost $20 per barrel amid fears of an impending glut in the market. Although OPEC has adjusted its plans to increase production, and supply in November reduced due to sanctions against Russia and Venezuela, the International Energy Agency (IEA) forecasts a supply surplus in 2026 at 3.7 million barrels per day - more than during the pandemic.

This article was AI-translated and verified by a human editor