New Delhi: Oil prices continued to decline on Friday as traders reacted to early signs that Russia and Ukraine may be moving closer to a possible peace agreement. The prospect of reduced geopolitical tension pushed Brent crude to around 62 dollars a barrel and West Texas Intermediate to about 58 dollars.

Analysts said the market is responding to the idea that an end to the conflict could remove the risk premium that has supported oil prices for more than three years. Even though a peace deal is not guaranteed, any progress in talks is seen as a major step that could change global supply expectations.

A stronger United States dollar also added pressure on crude prices. A firm dollar usually makes oil more expensive for buyers using other currencies, which can reduce demand. Uncertainty about when the United States Federal Reserve may cut interest rates has also kept investors cautious.

At the same time, stricter United States sanctions on major Russian energy companies such as Rosneft and Lukoil are beginning to affect Moscow’s export earnings. Officials in Washington say the restrictions are aimed at reducing Russia’s ability to fund its war, although traders are still watching how global buyers, especially in Asia, may adjust their imports.

Market observers note that Russia has found ways to limit the damage to its refining sector despite Ukrainian drone attacks. The country has used spare refinery capacity to keep output steady, adding another factor that could influence global supply.

With oil prices already down for three straight sessions, traders are waiting for clearer signals from peace efforts, economic data in the United States and the effect of new sanctions. Any confirmed progress in talks between Moscow and Kyiv could push prices even lower, while a breakdown in negotiations may lead to renewed volatility.