Oil prices fell as traders weighed the prospect of a ceasefire in Ukraine, with President Donald Trump pushing for a summit between Vladimir Putin and Volodymyr Zelenskiy after a series of high-level talks.

Brent oil prices fell below $66 a barrel, remaining within a narrow range they have held for the past two weeks. Any peace deal could eventually pave the way for easing restrictions on Russian crude exports, although Moscow has largely maintained its oil supplies since the conflict began.

Trump called the Russian president and urged him to begin working on plans for a one-on-one meeting with Zelenskiy after discussions with the Ukrainian leader on Monday at the White House. The US president told Fox News on Tuesday that both Russia and Ukraine must show flexibility in any negotiations.

Oil prices have fallen more than 10% this year on concerns about the impact of US trade policy and the prospect of oversupply as OPEC+ increases production again. The impact of the talks on the Ukraine war remains uncertain, and Treasury Secretary Scott Bessent reiterated on Tuesday that the US could raise tariffs on India for its purchases of Russian oil.

"Crude oil will likely be in a holding pattern," said Vandana Hari, founder of oil market analysis firm Vanda Insights in Singapore. "The path to resolving the conflict is open, but it could be a long one."

Despite the diplomacy, attacks from both sides continue. Ukraine said it carried out a new attack on Russia's Druzhba oil pipeline system on Monday, shutting down a vital channel for crude supplies to parts of central Europe. Ukraine said Russia attacked a domestic oil refinery in the country overnight.

While crude prices have largely remained rangebound due to thinner summer trading volumes and ongoing efforts to end the war, other market gauges have had a more busy August.

On the US Gulf Coast, crude prices reached some of their largest premiums in recent months, signaling that more supplies will be exported in the coming weeks. At the same time, the US benchmark price is trading at its widest discount relative to Brent since April, another factor that could boost overseas shipments. (alg)

Source: Bloomberg