Crude Oil Tumbles As Hopes Of An End To Russia-Ukraine War Surface

(RTTNews) - Crude oil slumped on Tuesday after reports emerged that a revised Russia-Ukraine peace plan proposed by the U.S. has been accepted by Ukraine.

WTI Crude Oil for January delivery was last seen trading down by $0.96 (or 1.61%) at $57.89 per barrel.

In the Middle East, the Gaza Peace Plan proposed by U.S. President Donald Trump is successfully moving to the second phase.

Encouraged by the progress, the Trump administration came up with a 28-point draft peace proposal last week to end the Russia-Ukraine war.

However, reports indicated that the agreement was more tilted towards Russia and forced Ukraine to make a lot of concessions, including ceding territories captured by Russia.

Ukraine President Volodymyr Zelenskyy reaffirmed that he was open to any peace plan only if it does not infringe on Ukraine's national interests.

Several European nations accused the U.S. of yielding to Russia and compelling Ukraine to make a heavy bargain.

The U.S. and Ukraine subsequently came up with a new, shorter 10-point peace plan, leaving the sensitive elements to be decided by the presidents of the warring nations.

This development has been cautiously welcomed by Ukraine's European allies.

While a U.S. official stated that Ukraine has agreed to the deal, Zelenskyy stated that more work needs to be done.

In line with the draft formulation, U.S. officials are meeting their Russian counterparts in Abu Dhabi today to take things further.

Despite these ongoing efforts, Russia and Ukraine have been exchanging air strikes against each other.

If the deal comes through successfully, U.S. sanctions on Russian oil could be lifted, leading to the release of a huge amount of oil into the market.

Russian oil sanctions have already forced China, India, and Turkey to turn away from Russia for their oil needs and dented the petrodollar revenues Russia gained so far.

Concerns of oversupply remain after various forecasts in recent days pointed to weak demand growth with excess supply in 2026.

In the U.S., markets are anticipating a rate cut by the Federal Reserve at its next FOMC meeting in December.

With the Fed already having instituted two rate cuts this year, analysts feel that another reduction would impact the U.S. dollar value and consequently affect oil prices in the short-term.