Brent crude and West Texas Intermediate (WTI) futures posted steady declines for a fourth consecutive month, continuing a trend tied to growing oversupply and caution around ongoing Russia-Ukraine peace negotiations.
Brent settled just above $63 per barrel, while WTI hovered near $58.75 as of Tuesday, November 25.
The prospect of lifted sanctions on Russian oil exports has cast a shadow over the market, stoking concerns among traders and analysts that an influx of previously curtailed barrels will deepen the existing global supply glut.
How have oil prices moved in recent months?
Oil prices have been under downward pressure since the end of July 2025, with both Brent and WTI benchmarks sliding over 12% year-over-year.
Volatility took hold as traders digested prospects for peace in Ukraine and fresh waves of sanctions targeting major Russian producers.
Recent weeks saw Brent crude drop to about $63.20 per barrel, down over 2.6% for the month, while WTI retreated to $58.75, extending its losing streak.
Persistent supply growth from OPEC+ nations and surging production in Brazil and Guyana have added to the burden.
Did you know?
In 2025, discounts on Russian crude compared to Brent crude reached over $20 per barrel, marking the largest gap since mid-2023.
Could peace talks shift market supply and sanctions?
United States-led efforts to broker a ceasefire between Russia and Ukraine have intensified, with several negotiation rounds hosted in Geneva this month.
There is mounting speculation that progress might lead Western nations to relax some sanctions on Russian producers such as Lukoil and Rosneft.
Lifting restrictions would unlock significant volumes of Russian crude currently outside regular trade flows.
Analysts warn that this new supply could exacerbate oversupply issues, especially if demand fails to pick up over the winter.
What is the outlook for global oil demand?
The demand picture for oil remains mixed, with cautious optimism from some forecasters and skepticism from others. While OPEC expects steady gains in global demand through 2029 and even beyond, other analysts, including Deutsche Bank and JP Morgan, predict that oil supply will likely outpace demand through at least the end of 2026.
This scenario points to a prolonged market surplus, especially as the adoption of electric vehicles and renewable energy slightly tempers consumption in advanced economies.
In contrast, energy demand is still rising in India, Africa, and the Middle East, giving some support to long-term forecasts.
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How do macroeconomic policies affect oil sentiment?
Macroeconomic signals have grown more relevant for oil traders, particularly expectations around fiscal and monetary policy.
Hopes for a rate cut by the Federal Reserve in December 2025 have offered short-lived rallies, as easier monetary conditions could enable greater economic activity and drive up fuel demand.
Still, these supportive factors have been repeatedly offset by the persistent effects of abundant supply.
Markets appear to be awaiting confirmation from central banks and producers before taking a more bullish stance.
Which risks could drive further price volatility?
Geopolitics, policy changes, and shifting alliances all threaten to disrupt the delicate balance in the oil market. Any renewed escalation between Russia and Ukraine, or an abrupt reversal of sanctions, could send prices dramatically higher or lower on short notice.
Additionally, OPEC+ is set to restore more supply to the market in early 2026. Production growth from South America may also accelerate, challenging efforts to support global prices.
After four months of consistent declines, energy investors remain cautious. Analysts are closely watching diplomatic negotiations, potential OPEC+ changes, and the ongoing interplay between fiscal policy and energy demand.
With so many moving parts, further volatility in oil markets seems likely in the months ahead.
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