Oil prices steadied on Tuesday after slipping 2% in the previous session, as market participants kept a close ‍eye on peace ‍talks to end Russia’s war in Ukraine and a looming decision ​on U.S. interest rates.

Brent crude futures were down 2 cents, or 0.03%, to $62.47 a ⁠barrel at 0101 GMT. U.S. West Texas Intermediate crude was at $58.84, down 4 cents, or ⁠0.07%.

Both contracts ‌fell by more than $1 on Monday after Iraq restored production at Lukoil's West Qurna 2 oilfield, one of the world's largest.

Ukraine will share a ⁠revised peace plan with the U.S. after talks in London between President Volodymyr Zelenskiy and the leaders of France, Germany and Britain.

"Oil is keeping to a tight trading range until we get a better idea of which way the ⁠peace talks will go," KCM ​Trade chief market analyst Tim Waterer said.

"If the talks break down, we expect oil to move higher, ‍or if progress is made, and there is a likelihood of Russian supply to the global energy market ​resuming, prices would be expected to drop," he added.

According to sources familiar with the matter, the Group of Seven countries and the European Union are in talks to replace a price cap on Russian oil exports with a full maritime services ban in a bid to reduce Russia's oil revenue.

Also on the radar is the Federal Reserve’s policy decision, due Wednesday, with markets pricing in an 87% probability of a quarter-point rate reduction.

Looking ahead, analysts at BMI expect oversupply in the energy market, which they ⁠say will keep prices under pressure in 2026.

"Although much ‌depends on the OPEC+ response to lower prices in the first quarter of 2026, we should see crude prices recover through the remainder of 2026 on the ‌back of ⁠lower production from slowing U.S. shale activity and steady growth in consumption pulling markets closer into ⁠balance," BMI added. (Reporting by Ashitha Shivaprasad in Bengaluru and Thomas Derpinghaus)