Morning Highlights: Oil slides as U.S. pushes Ukraine-Russia peace plan

Friday Nov 21, 2025

Oil fell sharply on Friday, extending a three-session decline as U.S. efforts to broker a Ukraine-Russia peace deal weighed on sentiment, raising the possibility of increased global supply and reinforcing broader macro caution.

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Market Snapshot

• Brent fell more than 2%, settling at $62.47 by 6:30 EST.

• WTI dropped to $57.97, with both contracts tracking weekly losses of ~4%.

• Risk appetite weakened on peace-deal headlines and uncertainty around U.S. interest-rate policy.

• A firmer dollar added downside pressure, with expectations for a December Fed rate cut falling to 35%, down from 90% a month earlier.

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Geopolitics

• Washington is pushing a peace plan aimed at ending the three-year Ukraine-Russia war.

• President Zelenskiy said he would work with the U.S. on the proposal, though Ukraine still deems Russia’s demands unacceptable.

• Analysts caution the path to an accord remains uncertain; prior attempts have failed.

• Market reaction reflects the view that sanctions could be relaxed if progress materializes.

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Russia Supply & Sanctions

• U.S. sanctions on Rosneft and Lukoil take effect today.

• Roughly 48 million barrels of Rosneft and Lukoil crude are currently on tankers seeking new destinations, per Bloomberg/Kpler.

• Cargoes (Urals, ESPO) were originally headed to China and India, with some lacking stated destinations.

• Despite sanctions, Russian exports remain steady near 3.4 mb/d, though flows are not reliably reaching end-markets.

• ING notes that if barrels back up and cannot clear, supply reductions could follow.

• Lukoil has until December 13 to divest its international portfolio.

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Macro

• Stronger dollar reinforces commodity pressure.

• Market skepticism grows over the likelihood and timing of Fed rate cuts.

• CME FedWatch shows sharply reduced odds for December easing.

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Oil markets are reacting to the possibility, however uncertain of a diplomatic breakthrough that could reshape Russian supply dynamics. Sanctions take effect today, but with flows steady and barrels still searching for buyers, traders are weighing whether restrictions will bite or ultimately be short-lived if peace negotiations advance.