Market Report Week 48 - 25.11.2025

Oil and bunker market: All focus on peace negotiations to stop the war in Ukraine 

The US–Russian “peace plan” for Ukraine, put forward last week, has dominated the oil market in the previous five days. Although the plan’s 28 points appear highly favorable to Russia and were likely drafted in Moscow, it kick-started the peace negotiations between the US and Ukraine.

Over the weekend, the Ukrainian delegation negotiated with the US in Geneva. The EU also partly participated in the talks, presenting a peace plan alongside Ukraine. Ukraine and the US issued a joint statement late Sunday, and there has reportedly been progress on an updated peace framework.

Basically, we can see three scenarios. Below, we discuss these and their impact on oil prices.

1. Several factors point to a peace agreement, or at least a ceasefire, moving closer after the weekend, which argues for lower oil prices. The same applies to the apparent US willingness to ease sanctions on Russia and its limited appetite for enforcing them. When the US takes ownership of a plan that is clearly drafted in Moscow, and when Trump once again attacks Ukraine and Zelensky on social media, it becomes difficult to imagine meaningful sanctions enforcement. In effect, the plan signals to China and India that they can continue buying Russian oil.
2. On the other hand, it is clear that Ukraine and the EU cannot accept the 28 points of the plan, as it would amount to a de facto capitulation. This suggests that no agreement will be reached, which argues for higher oil prices as the war will continue. That said, one should expect the US to lower sanction enforcement in this scenario
3. There is also the possibility that the US and Ukraine manage to agree on a new and more balanced plan. Today, some media reported, apparently unconfirmed, that Ukraine has in fact accepted a peace plan. The initial market reaction was to push prices lower. However, the challenge is that Russia must approve. Experience from, among other things, the Alaska meeting shows that Putin fundamentally wishes to continue the war and likely believes that time is on Russia’s side. A more Ukraine-friendly plan would therefore, all else equal, raise oil prices. And if Russia rejects a plan accepted by the US, we should expect increased sanctions enforcement, adding to the geopolitical premium.

We think that scenario 3 is the most likely outcome. Russia will not accept anything other than de facto Ukrainian capitulation. Unfortunately, it implies that the war will continue for now. A Scenario similar to what we saw after the Trump-Putin meeting in Alaska.