Oil Prices Rebound in Europe as Ukraine Peace Efforts Stall, But Supply Glut Fears Linger

Oil prices edged higher in European trading on Monday, recovering some ground after sharp losses in the previous session, as U.S.-led efforts to end the war in Ukraine failed to produce a decisive breakthrough. However, expectations of a potential supply surplus heading into 2026 continued to cap gains.

By 05:25 ET (10:25 GMT), February Brent crude futures were up 1.8% at $61.34 per barrel, while West Texas Intermediate (WTI) futures rose 2% to $57.88 per barrel. Both benchmarks had fallen more than 2.5% on Friday, giving back most of their earlier weekly gains.

Market sentiment was unsettled at the end of last week after a renewed diplomatic push raised hopes of progress toward ending the nearly three-year conflict. U.S. President Donald Trump said on Sunday that he and Ukrainian President Volodymyr Zelenskiy were “getting a lot closer, maybe very close” to an agreement, although both leaders admitted that key contentious issues remained unresolved.

Trump’s remarks followed a series of U.S.-led diplomatic initiatives aimed at securing a ceasefire. The absence of tangible progress helped stabilise crude prices on Monday, as traders concluded that a rapid resolution to the conflict — and any swift return of significantly higher Russian supply — was still far from guaranteed.

A credible peace deal could eventually put downward pressure on oil by reducing the geopolitical risk premium that has underpinned prices since Russia’s invasion of Ukraine.

At the same time, support for crude has been tempered by mounting concerns over a potential global supply surplus. Major forecasting agencies and analysts have warned that oil supply could outpace demand in 2026, driven by rising output from non-OPEC producers and a slowdown in consumption growth.

Prices have also drawn some near-term support from tightening supply risks linked to Venezuela. The United States has increased pressure on Venezuelan crude exports, including measures targeting shipments and buyers, constraining flows from the OPEC producer and partially offsetting broader fears of oversupply.