Oil remains one of the most strategic commodities in the world, influencing production costs, transportation, inflation, and geopolitical balances. Currently, the market is undergoing a significant downturn, driven by easing tensions surrounding the Russia–Ukraine conflict and by the strengthening of the U.S. dollar. Brent is trading around USD 62.40 and WTI around USD 58, levels far below the peaks seen in recent years.
Current Economic Environment
Impact of Russia–Ukraine Peace Negotiations
The United States is intensifying its efforts to push forward a peace agreement.
The proposed plan, seen as favorable to Russia, has three major effects:
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Reduces the risk of new sanctions against Moscow
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Mitigates concerns over stricter enforcement of existing sanctions
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Lowers the geopolitical risk premium, a key driver of oil prices since 2022
Result: Oil prices are mechanically declining as the market anticipates a more stable Russian supply.
Strengthening of the U.S. Dollar
The dollar is supported by the possibility that the Federal Reserve will temporarily pause its monetary easing cycle.
A stronger dollar consistently:
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makes oil more expensive for countries whose currencies depreciate,
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reduces demand,
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and therefore exerts downward pressure on prices.
Overall Oil Market Landscape
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Global inventories are relatively comfortable.
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The global economy is growing, but without excess.
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OPEC+ maintains variable discipline, but the market perceives overall supply as sufficient.
The combination of these factors explains the renewed decline in prices.
Investment Recommendation
Strategy: “Accumulate Gradually” on Price Weakness
Why invest in oil at this stage?
Prices are historically low
Brent around USD 62 is a level at which producing countries tend to become more cautious.
Downward pressures are already largely priced in.
Geopolitical risk is not gone
Nothing indicates that the peace plan will succeed.
Ukraine, Europe, and other actors consider the proposal unacceptable in its current form.
A resurgence of tensions could push prices sharply higher.
Medium-term global demand is rising
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Asia (India, China, ASEAN) should drive consumption in 2025–2026.
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Maritime and air transport remain dynamic.
Safe-haven value in a multi-asset portfolio
Oil provides protection against inflation and geopolitical shocks.
Its correlation with equities remains low during periods of stress.
OPEC+ could react
The organization has previously demonstrated its willingness to cut production significantly when prices risk falling too low.
Risks to Monitor
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A lasting Russia–Ukraine peace agreement
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A sharper global economic slowdown
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Prolonged strengthening of the U.S. dollar
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Unexpected extra supply (Iran, Venezuela…)
Conclusion
The current decline creates an attractive window for investors seeking exposure to the energy sector, but a gradual approach remains the most prudent. Medium-term fundamentals for oil remain solid.