Oil prices rise following a high-level call between former U.S. President Donald Trump and Russian President Vladimir Putin, sparking speculation over a potential ceasefire in the ongoing Ukraine conflict. The renewed diplomatic engagement injected fresh volatility into global energy markets, with benchmark crude climbing on supply risk fears.
According to data from Oilprice.com, Brent crude increased 0.76% to $65.04 per barrel, while West Texas Intermediate (WTI) rose 0.69% to $62.26. Murban crude also edged higher to $64.69 per barrel.
Ceasefire Talks Reignite Geopolitical Risk Premium
The two-hour call, confirmed by both leaders’ offices, focused on terms for halting hostilities in Ukraine. Trump posted on TruthSocial, describing the conversation as “productive” and revealed that both sides would “immediately begin negotiations” toward a ceasefire agreement. He also floated the possibility of renewed trade ties with Russia if peace is achieved.
However, President Putin reportedly insisted that any ceasefire must include Ukrainian recognition of Russian-annexed territories, a stance that complicates diplomatic progress.
“This dialogue reintroduces a premium into oil markets,” said Dr Stephan Kieninger, senior fellow at the American German Institute. “While peace is uncertain, the mere talk of de-escalation sharpens focus on supply chain recalibration.”
Investors responded swiftly, pricing in the potential for temporary disruptions or reconfigurations of regional supply routes.
Market Reacts to Geopolitical Momentum
The oil prices rise is rooted in anticipation, not resolution. Though no ceasefire has been formalised, markets perceive the Trump–Putin call as a potential pivot point in the conflict. Any disruption, positive or negative, to Russian oil exports could reverberate globally.
“In commodity markets, perception can move prices as powerfully as policy,” said Irene Amadi, senior energy analyst at BloombergNEF. “Geopolitical dialogue often signals coming shifts in supply certainty.”
Russia, a top-three global oil exporter, remains a critical supplier to Asia, Europe, and parts of Africa. Even the perception of a reshaped export map drives bullish sentiment.
OPEC+ Strategy Adds to Upward Momentum
Further amplifying the oil prices rise, OPEC+ officials signalled no immediate plans to boost supply despite increasing market tightness. While Kazakhstan’s May output exceeded its quota, top producers like Saudi Arabia and UAE are maintaining current limits, helping balance sentiment.
Recent remarks from OPEC+ delegates suggest that supply discipline will remain in place through Q3 2025 to support stable prices amid global uncertainty.
“OPEC+ is playing the long game. They’ll welcome a modest price rally if it aligns with broader market stability,” said a source close to the Vienna-based group.
Natural Gas Moves Higher in Parallel
Alongside oil, natural gas prices jumped 8.99%, reaching $3.393 per MMBtu, driven by seasonal demand and tightening U.S. inventories. This rise reflects broader energy market tensions as both fuels face supply-side pressure and shifting geopolitical narratives.
Implications for Nigeria’s Oil Strategy
For Nigeria, a key OPEC member, the oil prices rise offers short-term fiscal relief. Government revenue forecasts are pegged to a Brent crude benchmark above $70, and recent gains narrow budget deficits and boost foreign exchange reserves.
Additionally, the Dangote Refinery, now operational, positions Nigeria to benefit not just from crude exports, but also refined product distribution into West Africa, enhancing regional price control.
However, any fresh volatility especially tied to U.S.–Russia diplomacy could affect trade routes, marine insurance premiums, and spot contract pricing for Nigerian cargoes.
Outlook: Markets on Alert as Diplomacy Unfolds
The oil prices rise remains fragile. Without concrete outcomes from the Trump–Putin call, markets may retract gains or swing higher depending on the next headlines.
Analysts expect a short-term bullish bias, especially if OPEC+ maintains production discipline and U.S.–Russia diplomatic overtures continue.
“Markets are running on signals,” said Raheem Afolabi, commodities expert at Chatham House. “This rally is built on potential, not fundamentals yet.”
