Ceasefire Hopes Between Russia and Ukraine
OPEC+ Output Increase Fuels Oversupply Concerns
International oil prices have plummeted to their lowest levels in nearly five years, driven by the possibility of an end to the war between Russia and Ukraine and expectations of an oversupply.
As of 2:52 p.m. Eastern Time on December 16, 2025 (local time), West Texas Intermediate (WTI) crude oil on the New York Mercantile Exchange (NYMEX) was trading at $55.20 per barrel, down $1.47 (2.59%) from the previous session. During intraday trading, WTI fell to as low as $54.98 per barrel, marking its lowest point in four years and ten months since February 2021.
Brent crude, the global benchmark for oil prices, was also trading at $58.99 per barrel, down $1.57 (2.59%) from the previous day.
The decline in oil prices is being attributed to both an increase in global crude oil supply and expectations of easing geopolitical tensions. In particular, speculation that geopolitical risks surrounding the war in Ukraine may ease is exerting downward pressure on oil prices. It has been reported that U.S. President Donald Trump is pressuring Ukraine to accept a peace agreement with Russia by Christmas on December 25, weakening concerns about supply disruptions caused by a prolonged war.
In addition, as member countries of the Organization of the Petroleum Exporting Countries Plus (OPEC+) have effectively ended their years-long production cuts and are rapidly increasing output, the outlook for an oversupplied market has become even more pronounced.
The possibility of a U.S. economic slowdown is also weighing on oil prices. According to the November employment report released by the Bureau of Labor Statistics (BLS) under the U.S. Department of Labor, nonfarm payrolls increased by 64,000. This represents a turnaround from October, when nonfarm employment had decreased by 105,000 due to federal government workforce reductions. However, the unemployment rate rose to 4.6%, the highest level since September 2021.
Jorge Leon, Senior Vice President of Geopolitical Analysis at Rystad Energy, stated, "If a (ceasefire) agreement is reached between Russia and Ukraine, there is a high likelihood that attacks on Ukraine's (Russian) oil infrastructure and U.S. sanctions on Russia will be quickly lifted." He added, "In this case, the risk of short-term supply disruptions of Russian crude oil would be significantly reduced, and up to 170 million barrels of Russian oil currently stored at sea could return to the market." He further noted that if U.S. sanctions on Russia are lifted, oil-producing countries are likely to ramp up production.
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