Oil prices dropped sharply on Wednesday, with Brent crude falling 2.6% to $61.09 per barrel and WTI sliding 2.7% to $57.26, after media reports indicated that Ukraine has agreed in principle to a U.S.-drafted peace deal, though some minor details still need to be finalized.

White House Press Secretary Karoline Leavitt noted on X that further negotiations between Ukraine, Russia, and the U.S. are required before the agreement can be finalized.

Market participants said the potential peace deal could lead to the lifting of U.S. sanctions on Russian oil companies and ease concerns over disruptions to global energy supply caused by Ukrainian attacks on key infrastructure.

Commerzbank analysts highlighted that the gasoil crack spread—the difference between crude oil and refined product prices—has dropped $10 per barrel since last Thursday, reflecting optimism that the war in Ukraine may soon end.