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International benchmarks for crude oil slipped on Tuesday as traders bet that progress in Russia–Ukraine peace talks could pave the way for looser sanctions on Moscow’s crude exports, raising the prospect of greater global supply.

Brent crude futures fell 81 cents, or 1.22%, to settle at $65.79 a barrel. 

WTI for September delivery lost $1.07, or 1.69%, to close at $62.35.

Market sentiment softened after Washington signalled a willingness to ease secondary sanctions on importers of Russian oil, while discussions on a potential trilateral summit involving the US, Russia and Ukraine suggested a shift towards a negotiated settlement.

Still, analysts cautioned that oil’s downside remains limited in the near term, with speculative short positions at record highs. Any setback in peace efforts could quickly trigger a rebound as risk premiums return.

Written: Aiman Haikal