Oil prices drop over $1 as peace talks lift hopesBusiness

Traders were encouraged by signs of movement on two fronts. In Abu Dhabi, negotiators at two days of US-mediated talks between Russia and Ukraine agreed a major prisoner exchange before the sessions ended on Wednesday, although American mediators cautioned that deep differences remained on other issues, including territory. US envoys Jared Kushner and Steve Witkoff are now taking the framework to separate capitals to brief the Russian leadership and coordinate further steps with Ukrainian and European partners.

Hiroyuki Kikukawa, chief strategist at Nissan Securities Investment, told Reuters that markets were falling on expectations that behind-the-scenes efforts were under way to secure a ceasefire between Russia and Ukraine, and that the war in Iran was unlikely to escalate ahead of a US-China summit next week.

In the Middle East, Iranian security chief Mohsen Rezaei has said he will not allow even a single particle of enriched nuclear material to leave the country, and warned there would be consequences if the United States launched new strikes. Washington, for its part, says nuclear issues must be part of any initial negotiations with Iran, while US officials have played down the need for further military action.

Russia’s chief negotiator, Vladimir Medinsky, said mutual understanding had been reached on some issues, including groundwork for a prisoner exchange involving more than 1,000 captives from each side, while stressing that major differences remained. Moscow has also questioned the need for an immediate European role in the talks, while Kyiv and its European allies insist Europe must have a seat at every stage of real diplomacy.

The fall followed gains in the previous session, when Brent rose about 1.4 percent and WTI about 0.6 percent. Official stockpile data from the US Energy Information Administration is due later on Thursday, delayed by a day because of a US national holiday on Wednesday.