Oil prices drop as Trump pushes for Russia-Ukraine talks

Updates with additional context, latest price moves

Investing.com-- Oil prices slipped in Asian trading on Tuesday as investors assessed U.S.-Ukraine talks for clues on Russian oil supply outlook, with focus now turning to a possible meeting between the Ukrainian leader and Russian President Vladimir Putin.

As of 01:05 ET (05:05 GMT), Brent Oil Futures expiring in October fell 0.5% to $66.16 per barrel, while West Texas Intermediate (WTI) crude futures declined 0.8% to $62.22 per barrel.

Both contracts rose nearly 1% on Monday after U.S. Trade Adviser Peter Navarro criticized India’s purchases of discounted Russian crude as funding the war, renewing supply flow worries.

Trump-Zelenskiy meeting in focus

President Donald Trump hosted Ukrainian President Volodymyr Zelenskiy at the White House on Monday, joined by leaders from major European nations, in a high-stakes summit aimed at forging pathways toward ending Russia’s war in Ukraine.

In his public remarks, Trump pledged that the U.S. would help guarantee Ukraine’s security as part of any peace settlement, although he did not specify the form or scope of such assurances. 

Zelenskiy welcomed the announcement as "a major step forward.”

“There was no critical breakthrough. It appears the next step is a meeting between Zelensky and Putin, possibly within two weeks,” ING analysts said in a note.

Trump says Putin, Zelenskiy to meet

Trump said he had begun arranging a meeting between Ukraine’s Volodymyr Zelenskiy and Russia’s Vladimir Putin and floated a subsequent three-way discussion, keeping alive hopes for a pathway to negotiations. 

European leaders in Washington urged a ceasefire first, while Trump signalled support for Europe-led security guarantees for Kyiv.

“Betting markets aren’t overly convinced that we’ll see a ceasefire before the end of the year. Polymarkets is showing a 38% chance of a ceasefire, well below the peak of 78% seen in March,” ING analysts said.

“The modest price action in the oil market this morning appears to fit with this view."

Markets seek clarity on Trump’s 25% secondary India tariffs

Markets are also worried about 25% additional U.S. tariffs imposed on India for its purchase of Russian oil, set to take effect on August 27.

White House trade adviser Peter Navarro explicitly warned that India must halt its Russian oil trade or face further consequences. Meanwhile, Indian refiners, notably Indian Oil Corp, reaffirmed their intent to continue Russian oil imports if economically viable.

"To make matters worse, trade talks that were set to take place in late August have reportedly been postponed," ING analysts added.

Investors seek signals from ongoing diplomacy to gauge whether tensions will ease or further escalate.