Crude oil prices have hit a two-month low, falling 4% over the week. The drop comes as markets expect US President Donald Trump and Russian President Vladimir Putin could strike a deal on the Ukraine war during their upcoming meeting in Alaska.

Summit details

Trump will meet Putin on Friday in Alaska. The war in Ukraine will be the main topic. Reports suggest Trump has drafted proposals that could give Russia control over eastern Ukraine. He has publicly stated the plan would involve a “land swap” as part of ending the conflict.

Ukraine’s stance

Ukrainian President Volodymyr Zelenskyy has firmly rejected giving up any territory to Russia. However, traders remain hopeful that a deal could be reached, improving oil supply and easing prices.

Current market position

Brent crude traded near $66 a barrel after last week’s 4.4% fall. West Texas Intermediate hovered above $63, according to Bloomberg. Analysts say prices could drop further if the meeting leads to the lifting of sanctions on Russian oil.

Analyst view

Robert Rennie, head of commodity and carbon research at Westpac Banking Corp, told Bloomberg, “Crafting an agreement is going to be extremely difficult, but assuming the situation gets resolved, the path for Brent is down below $65 with risks we may see prices below $60 late in the fourth quarter of the year.”

Why a deal could lower prices

If sanctions on Russian oil are lifted, global supply would rise. More supply usually means lower prices. OPEC+ is also expected to boost production, reversing earlier output cuts. Both factors would push prices down further.

Impact of tariffs and economic slowdown

Trump’s high tariffs, including a 50% duty on Indian goods, could slow global economic growth. Slower growth reduces oil demand, adding more pressure on prices.

Risks if talks fail

Experts warn that if the summit fails and the war continues, prices could jump instead. “The market could quickly pivot to a bullish stance, potentially triggering a sharp rally in oil prices,” said Sugandha Sachdeva, founder of SS WealthStreet, to Reuters.

Key events ahead
Sachdeva added, “The near-term direction will hinge on several key events, including the August 15 meeting between the US and Russian presidents, upcoming speeches from Federal Reserve officials, and the release of the US CPI data.”