Oil prices rose on Monday as investors monitored the US-European summit focused on ending the war between Russia and Ukraine.

Markets are closely watching the meeting between US President Donald Trump and Ukrainian President Volodymyr Zelensky on halting the war with Russia.

The world is also awaiting further meetings between Trump and European leaders to discuss ways to end the Russia-Ukraine conflict.

Meanwhile, Russian oil supplies through the Druzhba pipeline to Hungary and Slovakia were halted after part of the network came under a Ukrainian attack.

On the trading front, Brent crude futures for October delivery rose 1.1% or 75 cents to settle at $66.60 a barrel.

US Nymex crude futures for September delivery increased 1% or 62 cents to close at $63.42 a barrel.

In a surprising development, Argentina, the second-largest economy in South America, has recently emerged as the continent’s third-largest oil producer. The boom in unconventional hydrocarbons production from the Vaca Muerta formation—one of the world’s five largest shale reserves—is driving significant growth in oil and natural gas output. State-owned energy company YPF is leading the development of this shale field, transforming into one of the most efficiently managed state-run energy firms in Latin America. Despite being nationalized in April 2012, YPF’s hydrocarbon production has continued to rise while operating costs declined, sharply boosting both its profits and profitability.

Following former president Cristina Fernández de Kirchner’s forced takeover of a 51% stake in YPF from Spanish energy giant Repsol in 2012, the company’s shares collapsed, losing three-quarters of their value as investor confidence was severely damaged. At the time, concerns mounted that Argentina’s financial and economic troubles could weigh heavily on the company. Surprisingly, that scenario did not materialize. Instead, YPF took the lead in developing the Vaca Muerta field, which covers 8.6 million acres. Although discovered in 1927, it was not fully assessed until 2011.

One of the main reasons for the delay in developing the formation was Repsol’s reluctance to commit major investments to exploration in Argentina, due to strict regulations that heavily squeezed profitability. Against this backdrop, the government decided to nationalize YPF to address its energy shortfall and reduce the country’s large trade deficit.

Buenos Aires has long seen Vaca Muerta’s reserves as a strategic opportunity to revive its struggling economy. The formation is estimated to hold about 16 billion barrels of recoverable shale oil and 308 trillion cubic feet of natural gas, making it the world’s second-largest shale gas resource and fourth-largest shale oil resource. It is also the largest unconventional hydrocarbons reservoir in South America.

At first, Vaca Muerta was compared with the US Eagle Ford formation. But extensive development proved it rivals the best shale plays globally, with analysts even likening it to the US Permian Basin, America’s largest oil field producing around six million barrels per day. Industry experts highlight Vaca Muerta’s high reservoir pressure and superior rock thickness, qualities that make it even more attractive than many US formations.

According to Argentina’s Ministry of Economy, Vaca Muerta is the largest shale-producing area in South America and one of the leading unconventional reserves worldwide. In the first half of 2025, it produced an average of 449,299 barrels per day of shale oil and 2.8 billion cubic feet per day of shale gas. These volumes alone—excluding conventional output—surpass the oil production of many South American countries.

YPF benefited early by securing the best assets in Vaca Muerta at a time when private firms remained cautious over expropriation risks and economic volatility. As a result, the national company today is the leading oil and gas producer in the formation.

Official data shows that in the first half of 2025, YPF produced 243,183 barrels per day of shale oil and 695 million cubic feet per day of shale gas, up 18% and 7% year-on-year respectively. Total production reached 343,228 barrels per day of crude oil (71% from shale) and 904 million cubic feet per day of natural gas (77% from shale). This means YPF accounts for 46% of Argentina’s oil production and 29% of its natural gas.

By 2024, YPF had proven reserves of 1.1 billion barrels of hydrocarbons, with shale oil representing 78% (854 million barrels). The reserves were divided into 56% crude oil, 44% natural gas, and 6% natural gas liquids, with an overall reserve life of 5.6 years. Vaca Muerta reserves alone are expected to last 8.3 years. The company’s proven reserves grew 19% over the past five years, with shale oil reserves nearly doubling since 2020. YPF plans to invest $5 billion in 2025, including $3.6 billion for exploration and production, mostly in Vaca Muerta, as part of a $36 billion five-year plan beginning in 2025, with about 80% allocated to exploration and production. The company also intends to divest stakes in 16 conventional oil concessions to focus on developing the shale formation.

What makes Vaca Muerta attractive to companies is its low breakeven price of $36 per barrel, far below production costs at Argentina’s conventional fields ($55–75 per barrel). YPF’s total lifting cost in Q2 2025 stood at $15.30 per barrel, but only $4.60 for its Vaca Muerta operations. The company expects this to fall to $5 per barrel by 2027 as it transitions to almost entirely shale-based production. CEO Horacio Marín stated that the company’s Vaca Muerta operations are profitable at Brent crude prices of $40 per barrel.

YPF projects production to reach 2.1 million barrels of oil equivalent per day by 2030, including 820,000 barrels of oil, 1.1 million barrels of oil equivalent of natural gas, and 170,000 barrels per day of natural gas liquids. Around 48% of the oil and 40% of the gas are expected to be exported. The company also forecasts operating EBITDA to rise from $5.3 billion in 2025 to $11 billion in 2029, with free cash flow doubling to $3.1 billion.

This growth has turned YPF into one of South America’s most prominent state-owned energy companies, benefiting from the Vaca Muerta boom and expanded energy infrastructure. It is also a major achievement for Argentina’s economy, helping boost exports and reduce imports, thereby lowering the risk of trade deficits. Government data shows oil exports reached $5.5 billion in 2024, a 41% increase from 2023, contributing to a $19 billion trade surplus compared with a $7 billion deficit the year before.

Most US stock indexes stabilized at the beginning of Monday’s trading amid anticipation of a speech by Federal Reserve Chair Jerome Powell as well as the earnings results of some companies.

Powell will deliver a speech reviewing the US central bank’s monetary policy at the Jackson Hole symposium, which includes a number of global central bank officials.

Investors are also awaiting the earnings results of US retail companies this week, led by Walmart and Target, to look for indicators on the resilience of consumer spending in the United States.

As for trading, the Dow Jones Industrial Average fell by less than 0.1% (equivalent to 17 points) to 44,928 points as of 16:12 GMT, while the broader S&P 500 index declined by 0.1% (equivalent to 4 points) to 6,445 points, whereas the Nasdaq Composite dropped by 0.1% (equivalent to 29 points) to 21,595 points.

QNB Group stated in its weekly commentary that after a turbulent first half of 2025, which saw a sharp rise in uncertainty over US tariffs following the sweeping trade measures launched by US President Donald Trump under the name “Liberation Day,” the global economy has begun to adapt to a more restrictive trade environment, making economists and investors more cautious.

The group explained that commodity prices provide clearer signals about global demand, inflationary pressures, and investor confidence compared to incomplete trade negotiations. Historically, commodity prices have been regarded as a reliable real-time indicator of economic growth trends. Their recent movements suggest more moderate growth expectations along with declining risks of runaway inflation.

According to the report, there are three main factors supporting this trend:

1- Stability in commodity indexes: Levels have remained well below their cyclical peak of May 2022 and have moved within a narrow range since the start of 2025. This reflects the absence of signs of either excessive nominal growth acceleration or a sharp slowdown leading to recession. The decline in volatility of key commodity prices (such as energy and industrial metals) also reinforces the disinflationary path despite the sharp drop in the US dollar and the short-term inflation risks from the new tariffs.

2- Copper-to-gold ratio: This measure, often used to gauge expectations for growth, inflation, and risk appetite, continues to decline. If markets were betting on a pro-growth and pro-inflation agenda under Trump, copper—as a growth-sensitive asset—would have outperformed gold as a safe haven. Instead, the current trend reflects a more cautious stance consistent with moderate slowdown and stable inflation expectations.

3- Strength of gold prices: Gold is currently trading near record levels at around $3,330 per ounce, up about 80% since the 2022 commodity peak. This is largely due to rising geopolitical risks and investor preference for politically neutral assets. Silver—used both as a monetary and industrial asset—had lagged behind gold until recently, but has begun rising, signaling that industrial demand may have bottomed out.

Overall, QNB sees commodity markets sending a reassuring signal: a moderate slowdown in global growth with continued disinflation, amounting to a kind of soft landing for the world economy amid turbulent political conditions.