The US and Russia are secretly discussing a peace plan for Ukraine. Next week, the focus is on the Putin-Trump meeting. Citigroup warns that oil prices could fall to $50.
2025-08-09 06:52:32
Oil prices were largely steady on Friday as the market awaited a meeting between Russian President Vladimir Putin and U.S. President Donald Trump in the coming days, but crude posted its biggest weekly drop since late June as the economic outlook was hit by tariffs.
Brent crude futures settled up 0.2% at $66.59 a barrel, while U.S. crude futures were flat at $63.88. Brent crude fell 4.4% this week, while U.S. crude fell 5.1% from Friday's close.
President Trump posted on TruthSocial on Friday: "The highly anticipated meeting between myself, the President of the United States, and President Vladimir Putin of Russia will take place in the great state of Alaska on August 15, 2025 (next Friday). More details to come."
U.S. crude oil fell more than 1% after Bloomberg News reported on Friday that the United States and Russia are seeking a deal to end the war in Ukraine and bring territory seized militarily by Russia under its control.
Reports say officials from both sides are holding consultations on territorial issues in preparation for a summit between Trump and Putin as early as next week.
The possible meeting has raised hopes for a diplomatic end to the war in Ukraine, which could lead to an easing of sanctions on Russia, and comes amid rising trade tensions between Trump and buyers of Russian oil.
Polish media outlet Onet reported that they had learned details of a Ukrainian peace plan presented by US Special Envoy Witkow to Russian President Vladimir Putin during talks in Moscow. While Onet did not disclose the source of the information, the report stated that the proposal was coordinated by European countries. The US proposal includes: 1. A ceasefire agreement between Russia and Ukraine, but not a full peace agreement; 2. The US considering de facto recognition of newly controlled Russian territory, but shelving the issue for 49 or 99 years; 3. The lifting of most sanctions on Russia and the resumption of energy cooperation in the long term, namely importing Russian natural gas and oil. The report also stated that the proposal does not include preventing NATO's eastward expansion, a consistent demand of Moscow. Furthermore, Russia will not receive any commitment to cease military support for Ukraine, but this is acceptable to Russia.
This week, Trump threatened to increase tariffs on India if it continued to buy Russian oil.
Higher U.S. tariffs on imports from a range of trading partners took effect on Thursday, raising concerns about economic activity and crude oil demand, ANZ Bank analysts said in a note.
OPEC+ agreed on Sunday to boost oil production by 547,000 barrels per day (bpd) in September, the latest in a series of accelerated output increases by the group to regain market share. A Reuters survey released on Friday showed OPEC oil production rose further in July following the OPEC+ deal, although additional cuts in Iraq and drone attacks on Kurdish oil fields limited the increase.
The dollar strengthened on Friday but ended the week lower. A stronger greenback hurts foreign buyers' demand for dollar-denominated crude oil.
Citigroup analysts said on Thursday their base case remains that Brent crude prices will fall to just above $60 a barrel by the end of the year, citing a weaker market.
The bank noted that geopolitical negotiations have been slow, and while India’s reduced purchases have had a modest impact on Russian supply (estimated at around 500,000 barrels per day), the Asian giant is absorbing more discounted Russian crude. The bank added that the US’s willingness to implement the deal may remain limited due to concerns that global oil prices will be suppressed.
Citigroup said a quick and comprehensive deal between the United States and India could be bearish for oil prices. While it might not immediately increase supply significantly, it could remove a key geopolitical risk that has existed in crude and diesel markets since 2022, gradually redirecting Russian oil flows toward shorter trade routes, allowing oil prices to fall to around $50 a barrel, the bank said.
Citigroup said this would put OPEC+ "back in the driver's seat" on how to respond to falling oil prices. OPEC+ agreed earlier this week to increase oil production by 547,000 barrels per day in September, the latest in a series of accelerated production increases by OPEC to regain market share. Citigroup also said that Brent crude prices could rise if more than 1 million to 1.5 million barrels per day of Russian supply were affected, or if India stopped importing about 1.75 million barrels per day of oil from Russia, with Asian countries absorbing some of that.
Israeli Prime Minister Benjamin Netanyahu's office confirmed on Friday that the security cabinet has approved a plan for the Israel Defense Forces to take over Gaza City.
Gaza City is located in the northern part of Gaza and is currently home to about 800,000 people. In a statement, the Israeli Prime Minister's Office said Israel will provide humanitarian aid to civilians outside the war zone and that the cabinet decided to support Netanyahu's "proposal to defeat Hamas."
The prime minister's office said a majority of cabinet members also backed five principles proposed by Israel in exchange for ending the war with Hamas.
The specific contents are as follows: 1. Hamas disarmament; 2. All 50 remaining hostages are released, 20 of whom are believed to be alive; 3. Demilitarization of the Gaza Strip; 4. Israeli security control of the Gaza Strip; 5. The establishment of an alternative civilian government that cannot be Hamas or the Palestinian Authority. It is not clear why the statement only mentioned control of Gaza City, rather than the plan announced by Netanyahu on Thursday to occupy the entire Gaza Strip.
On the 8th, the French Ministry of Foreign Affairs issued a statement condemning Israel's plan to take over Gaza City "in the strongest terms," stating that the Israeli army's renewed military expansion is aimed at achieving military control over the entire Gaza Strip. The French Ministry reiterated its firm opposition to any plan to occupy the Gaza Strip and expel its residents, calling it a serious violation of international law and a "complete stalemate" in the regional situation. The statement noted that occupying the Gaza Strip would not only fail to improve Israel's security, but would also undermine the legitimate aspirations of Palestinians to live in peace. The statement also stated that France will continue to support the "two-state solution," emphasizing that it is the only way to ensure lasting peace between Israel and Palestine.
Oil prices next week will focus on the meeting between Trump and Putin, as well as the OPEC monthly crude oil market report, EIA monthly short-term energy outlook report, and IEA monthly crude oil market report to be released on Tuesday and Wednesday.
Brent crude futures settled up 0.2% at $66.59 a barrel, while U.S. crude futures were flat at $63.88. Brent crude fell 4.4% this week, while U.S. crude fell 5.1% from Friday's close.
President Trump posted on TruthSocial on Friday: "The highly anticipated meeting between myself, the President of the United States, and President Vladimir Putin of Russia will take place in the great state of Alaska on August 15, 2025 (next Friday). More details to come."
U.S. crude oil fell more than 1% after Bloomberg News reported on Friday that the United States and Russia are seeking a deal to end the war in Ukraine and bring territory seized militarily by Russia under its control.
Reports say officials from both sides are holding consultations on territorial issues in preparation for a summit between Trump and Putin as early as next week.
The possible meeting has raised hopes for a diplomatic end to the war in Ukraine, which could lead to an easing of sanctions on Russia, and comes amid rising trade tensions between Trump and buyers of Russian oil.
Polish media outlet Onet reported that they had learned details of a Ukrainian peace plan presented by US Special Envoy Witkow to Russian President Vladimir Putin during talks in Moscow. While Onet did not disclose the source of the information, the report stated that the proposal was coordinated by European countries. The US proposal includes: 1. A ceasefire agreement between Russia and Ukraine, but not a full peace agreement; 2. The US considering de facto recognition of newly controlled Russian territory, but shelving the issue for 49 or 99 years; 3. The lifting of most sanctions on Russia and the resumption of energy cooperation in the long term, namely importing Russian natural gas and oil. The report also stated that the proposal does not include preventing NATO's eastward expansion, a consistent demand of Moscow. Furthermore, Russia will not receive any commitment to cease military support for Ukraine, but this is acceptable to Russia.
This week, Trump threatened to increase tariffs on India if it continued to buy Russian oil.
Higher U.S. tariffs on imports from a range of trading partners took effect on Thursday, raising concerns about economic activity and crude oil demand, ANZ Bank analysts said in a note.
OPEC+ agreed on Sunday to boost oil production by 547,000 barrels per day (bpd) in September, the latest in a series of accelerated output increases by the group to regain market share. A Reuters survey released on Friday showed OPEC oil production rose further in July following the OPEC+ deal, although additional cuts in Iraq and drone attacks on Kurdish oil fields limited the increase.
The dollar strengthened on Friday but ended the week lower. A stronger greenback hurts foreign buyers' demand for dollar-denominated crude oil.
Citigroup analysts said on Thursday their base case remains that Brent crude prices will fall to just above $60 a barrel by the end of the year, citing a weaker market.
The bank noted that geopolitical negotiations have been slow, and while India’s reduced purchases have had a modest impact on Russian supply (estimated at around 500,000 barrels per day), the Asian giant is absorbing more discounted Russian crude. The bank added that the US’s willingness to implement the deal may remain limited due to concerns that global oil prices will be suppressed.
Citigroup said a quick and comprehensive deal between the United States and India could be bearish for oil prices. While it might not immediately increase supply significantly, it could remove a key geopolitical risk that has existed in crude and diesel markets since 2022, gradually redirecting Russian oil flows toward shorter trade routes, allowing oil prices to fall to around $50 a barrel, the bank said.
Citigroup said this would put OPEC+ "back in the driver's seat" on how to respond to falling oil prices. OPEC+ agreed earlier this week to increase oil production by 547,000 barrels per day in September, the latest in a series of accelerated production increases by OPEC to regain market share. Citigroup also said that Brent crude prices could rise if more than 1 million to 1.5 million barrels per day of Russian supply were affected, or if India stopped importing about 1.75 million barrels per day of oil from Russia, with Asian countries absorbing some of that.
Israeli Prime Minister Benjamin Netanyahu's office confirmed on Friday that the security cabinet has approved a plan for the Israel Defense Forces to take over Gaza City.
Gaza City is located in the northern part of Gaza and is currently home to about 800,000 people. In a statement, the Israeli Prime Minister's Office said Israel will provide humanitarian aid to civilians outside the war zone and that the cabinet decided to support Netanyahu's "proposal to defeat Hamas."
The prime minister's office said a majority of cabinet members also backed five principles proposed by Israel in exchange for ending the war with Hamas.
The specific contents are as follows: 1. Hamas disarmament; 2. All 50 remaining hostages are released, 20 of whom are believed to be alive; 3. Demilitarization of the Gaza Strip; 4. Israeli security control of the Gaza Strip; 5. The establishment of an alternative civilian government that cannot be Hamas or the Palestinian Authority. It is not clear why the statement only mentioned control of Gaza City, rather than the plan announced by Netanyahu on Thursday to occupy the entire Gaza Strip.
On the 8th, the French Ministry of Foreign Affairs issued a statement condemning Israel's plan to take over Gaza City "in the strongest terms," stating that the Israeli army's renewed military expansion is aimed at achieving military control over the entire Gaza Strip. The French Ministry reiterated its firm opposition to any plan to occupy the Gaza Strip and expel its residents, calling it a serious violation of international law and a "complete stalemate" in the regional situation. The statement noted that occupying the Gaza Strip would not only fail to improve Israel's security, but would also undermine the legitimate aspirations of Palestinians to live in peace. The statement also stated that France will continue to support the "two-state solution," emphasizing that it is the only way to ensure lasting peace between Israel and Palestine.
Oil prices next week will focus on the meeting between Trump and Putin, as well as the OPEC monthly crude oil market report, EIA monthly short-term energy outlook report, and IEA monthly crude oil market report to be released on Tuesday and Wednesday.
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