Oil Moves Higher As Trump Threatens Putin With ‘Severe Consequences’ Over Ukraine Peace Deal

Benchmark Brent crude prices rose 0.3% to $65.83 per barrel, while U.S. West Texas Intermediate crude prices gained 0.4% $62.88 per barrel at 4.27 a.m. ET.

Oil prices moved higher on Thursday after Donald Trump warned Russia of “severe consequences” if it did not agree to a ceasefire in Ukraine, posing threats to oil supplies.

While the U.S. President did not specify the consequences, Trump has previously threatened economic sanctions for the buyers of Russian oil and has already imposed secondary tariffs on India, which will take effect later this month.

Benchmark Brent crude prices rose 0.3% to $65.83 per barrel, while U.S. West Texas Intermediate crude prices gained 0.4% $62.88 per barrel at 4.27 a.m. ET. Both contracts had plunged in the previous session after a strong supply outlook raised bearish bets. Retail sentiment on Stocktwits about the United States Oil Fund (USO) was in the ‘bullish’ territory at the time of writing.

Separately, according to a report by Time magazine, German Chancellor Friedrich Merz said that Trump shared an “exceptionally constructive and good conversation” with Ukrainian President Volodymyr Zelensky and key European leaders on Wednesday. Trump is scheduled to meet Russian President Vladimir Putin on Friday.

According to a Reuters News report, Rystad Energy wrote to clients that the uncertainty of U.S.-Russia peace talks continues to add a “bullish risk premium,” given Russian oil buyers could face more economic pressure."

Separately, Citibank analysts said on Wednesday that Brent oil prices could slip toward the low $60-per-barrel region if there is progress toward a U.S.-Russia deal.

"Additional downside would have to involve a further slowdown in China's crude oil imports and in refinery buying to make more diesel," Citi analysts noted.

Oil markets were also likely hopeful about a rise in oil demand as hopes of a September rate cut by the Federal Reserve continued to rise. However, the gains were capped by the IEA's forecast, which stated that oil supplies would grow in 2025 and 2026, more than expected.

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