Oil prices and energy stocks have fallen sharply after US President Donald Trump pushed a new peace plan to end the Russia-Ukraine war, prompting immediate scepticism from analysts and renewed uncertainty across global energy markets.
Brent crude dropped 2.2% to $62 a barrel on Friday afternoon in London, extending Thursday’s small loss. West Texas Intermediate fell 2.6% to $57.46. Europe’s Stoxx Oil and Gas index slipped more than 2.4%, with Shell and BP down around 1.4%, Equinor off 2.3% and Siemens Energy down nearly 8%. In the US, Exxon Mobil and Chevron fell 1.1% and 0.6% respectively.
The declines followed widespread leaks of a draft 28-point peace proposal drawn up by Washington and Moscow. The plan would require Ukraine to surrender major territories including Crimea, Luhansk and Donetsk, freeze current battle lines in Kherson and Zaporizhzhia, halve its armed forces to 600,000 personnel and formally abandon its NATO ambitions. In exchange, Russia would be readmitted to the G8, receive staged sanctions relief and face minimal military restrictions.
Guntram Wolff, senior fellow at Bruegel, said the proposal was unlikely to be viable. “I really don’t think it can fly,” he said, arguing that cutting Ukraine’s military by a third without NATO protection “would leave Ukraine totally vulnerable to a renewed attack.” Michael O’Hanlon at the Brookings Institution said territorial concessions would be “completely illegitimate” and warned that limiting Ukraine’s future defensive capacity would undermine its sovereignty.
Ukrainian President Volodymyr Zelenskyy said Kyiv was prepared to analyse the proposals but repeated that any agreement must protect Ukraine’s independence and territorial integrity. “We are geared up for clear and honest work,” he said, adding that he expects to speak with Trump “in the coming days.” Ukraine’s National Security and Defense Council said discussions with a US delegation were continuing but insisted that Ukraine’s principles — sovereignty, civilian safety and a just peace — “remain unchanged.”
European leaders have also pushed back, with EU foreign policy chief Kaja Kallas saying Europe “must have a seat at the table,” and French Foreign Minister Jean-Noël Barrot warning that “peace cannot be a capitulation.” The Kremlin said it had not received formal documents but was open to talks.
Energy markets also weighed the start of new US sanctions on Russian oil producers Rosneft and Lukoil, a stronger US dollar, and expectations for the Federal Reserve’s upcoming interest-rate decision. Strategists at Saxo Bank said the combination of the draft peace plan and fresh sanctions had put additional pressure on oil.
The timing of the proposal has drawn attention. Ukraine is entering a fourth wartime winter under sustained Russian strikes on energy infrastructure, with widespread blackouts and heavy casualties reported from recent attacks. A US Army delegation visited Kyiv this week, with Ukraine emphasising that protecting its airspace and stabilising the front line remain essential for any durable settlement.
While the Trump administration has described the plan as a “working document,” analysts across Europe and the US say the terms are unenforceable in their current form. As Keir Giles of Chatham House noted, similar initiatives have surfaced before: “This agreement is not going anywhere — another iteration of the same merry-go-round.”
