Oil prices reversed early losses on Monday after US President Donald Trump declared an “energy ceasefire” between Russia and Ukraine, although scepticism among traders over the durability of the agreement limited expectations of improved global crude supplies.
Brent crude futures for December delivery settled at $105.68 per barrel, gaining 0.92 per cent on the day, while US West Texas Intermediate (WTI) crude futures for November delivery closed at $92.72 per barrel, up 0.95 per cent.
Both benchmarks had fallen by approximately 1.5 per cent earlier in the trading session before recovering as investors reassessed the implications of Trump’s announcement for global energy markets.
The initial decline reflected hopes that a pause in attacks on energy infrastructure could reduce the risk of further disruptions to oil production, transportation and exports.
However, the subsequent rebound suggested that market participants remained unconvinced that the agreement would translate into a meaningful improvement in supply conditions.
Russia and Ukraine have been involved in a prolonged conflict that has repeatedly threatened energy infrastructure and contributed to uncertainty in international oil markets.
Attacks on refineries, storage facilities and other energy installations can disrupt petroleum supplies, while concerns over shipping routes and export facilities can push prices higher.
Trump’s declaration therefore introduced a fresh variable into an already sensitive market, where geopolitical developments continue to influence price movements alongside demand expectations and production levels.
For oil traders, the key question is whether the proposed ceasefire will be respected by both sides and whether it will lead to a sustained reduction in attacks on energy assets.
A temporary pause may provide some relief to energy markets, but it would not necessarily guarantee an immediate increase in available crude supplies. Damaged infrastructure may require substantial repairs, while logistical challenges and existing restrictions could continue to affect exports.
The contrasting movements in Brent and WTI also highlighted the market’s cautious response.
Although both benchmarks ended higher, their gains were modest compared with the losses recorded earlier in the session, indicating that investors were not prepared to price in a significant reduction in geopolitical risks.
Developments surrounding the Russia-Ukraine conflict are expected to remain a major influence on oil prices in the coming sessions, particularly as traders monitor compliance with the proposed truce and assess its potential effect on energy flows.
For now, the market’s reaction underscores a familiar reality: political declarations can quickly shift sentiment, but sustained changes in oil prices ultimately depend on whether those announcements produce measurable changes in global supply and demand.
