Oil Prices Decline As Trump-Putin Summit in Alaska Nears: What It Means for Global Markets?

Ahead of the highly-anticipated US President Trump's meet with Russian President Vladimir Putin on August 15, 2025, oil prices slipped on Friday as expectations rose of easing in sanctions imposed on Kremlin as result of being engaged in war with Ukraine over the last three years. 

The brent crude futures dipped 49 cents or 0.7 per cent to USD 66.35 a barrel as of 4:35 pm. Meanwhile, U.S. West Texas Intermediate crude futures declined 58 cents, or 0.9 per cent, to USD 63.38.

Trump has already taken off from Andrews Airbase outside Washington D.C. for his summit with his Russian counterpart at Joint Base Elmendorf-Richardson, Anchorage. The top item on the agenda is ceasefire in Ukraine at the top of its agenda. 

While the US President believes that Russia is set to end the war in Ukraine, he has also warned Russia of imposing secondary sanctions on Kremlin if discussions with the latter don't lead to a peaceful resolution.    

UBS commodities analyst Giovanni Staunovo said, "The market is watching out for whether there is a ceasefire or not. An expectation of a ceasefire translates into more Russian production,"  citing a Reuters report. 

"The question is will there be escalation or de-escalation?," he said. 

In this week, WTI is set to drop 0.7% while Brent is on track for a 0.4 per cent gain.

Weaker economic data from China, meanwhile, raised concerns over fuel demand.

Chinese government data showed factory output growth slumped to an eight-month low and retail sales growth expanded at its slowest pace since December, weighing on sentiment despite stronger oil throughput in the world's second-largest crude user, as per a Reuters report. 

Also Read: Trump’s Tariff on India for Russian Oil May Have Sparked Putin Meeting

Throughput at Chinese refineries rose 8.9 per cent year on year in July, but that was down from June levels, which were the highest since September 2023. Despite the increase, China's oil product exports last month were also up from a year ago, suggesting lower domestic fuel demand.

Forecasts of a growing oil market surplus also weighed on sentiment, as did the prospect of higher-for-longer U.S. interest rates.

Bank of America analysts said on Thursday that they were widening their forecast for the oil market surplus, citing growing supplies from the OPEC+ producer group comprising the Organization of the Petroleum Exporting Countries, Russia and other allies.

The analysts now project an average surplus of 890,000 barrels per day from July 2025 through June 2026.

That forecast follows this week's International Energy Agency predictions saying the oil market looks "bloated" after the latest increases to OPEC+ output.