Oil prices climbed on Thursday after diplomatic efforts to resolve the Russia-Ukraine conflict collapsed, reviving concerns over global supply risks. The breakdown in talks erased earlier hopes of easing sanctions on Russian crude and fueled renewed buying interest in the market.
Light crude futures closed the day at $63.52 per barrel, gaining $1.54 or 2.48% compared to last week’s settlement. The rebound followed two consecutive weeks of declines, with traders responding to a mix of geopolitical tensions, strong inventory data, and improved demand outlook.
Earlier in the week, crude traded cautiously as markets anticipated a breakthrough in negotiations involving former U.S. President Donald Trump, Ukrainian President Volodymyr Zelenskiy, and the potential participation of Russia in a trilateral summit. Traders speculated that progress could pave the way for sanctions relief, potentially unlocking additional Russian supply.
However, optimism faded midweek when both Moscow and Kyiv accused each other of stalling discussions. The situation escalated after Russia launched a large-scale air assault near the EU border, prompting Ukraine to retaliate with strikes on a Russian refinery. Analysts noted that these developments reinforced the geopolitical risk premium, a factor that continues to shape crude price movements.
Market experts at Ritterbusch and Associates said, “Some geopolitical risk premium is slowly being pumped back into the market.” Others cautioned that fresh speculation over tighter sanctions on Russian exports could further heighten volatility in the coming weeks.
With diplomacy stalled and tensions intensifying, oil traders are once again recalibrating their positions around supply disruptions and sanctions risks, signaling that geopolitical factors remain central to near-term price direction.