Oil settles mixed as Russia–Ukraine peace talks counter US crude draw and Iran standoff

Global crude oil futures settled mixed on Wednesday after surrendering early $2 gains as prospective Russia–Ukraine peace talks and a surprise US distillate build countered a steep US crude inventory draw and expanding Gulf tanker strikes.

Crude benchmarks pared intraday rallies of more than $2 a barrel after the Kremlin confirmed Russian President Vladimir Putin agreed to resume US-mediated peace talks with Ukraine next month following meetings with US envoy Steve Witkoff. Brent edged up 3 cents, or 0.03%, to settle at $108.82 a barrel, while newly front-month December WTI shed 67 cents, or 0.7%, to close at $97.15, widening the transatlantic spread to $11.67. BOK Financial analysts noted a Ukraine truce could unlock tight global diesel supplies.

Mixed US government inventory data and federal reserve loans further tempered upward momentum. Energy Information Administration figures showed commercial crude stockpiles fell by 3.06 million barrels to 412.5 million barrels last week, nearly quadruple the 820,000-barrel draw forecast. However, distillate inventories unexpectedly rose by 1.68 million barrels to 104.3 million barrels against projections for a 1.16-million-barrel drop, alongside a Department of Energy offer to loan nearly a third of the 1-million-barrel US emergency heating oil reserve.

Heightened Middle East war risks nonetheless prevented a deeper sell-off. Iranian President Masoud Pezeshkian stated Washington cannot expect dialogue while blockading Tehran, while Foreign Minister Abbas Araqchi affirmed Iran’s readiness to defend itself. At least two more ships were struck overnight in the Strait of Hormuz—maintaining Kpler’s two-week tally at 18 vessel attacks—with LSEG analysts warning that Iranian strikes have expanded into the Gulf of Oman, threatening regional crude loadings and ship-to-ship transfers.