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Fuel retailers are under pressure to cut their pump prices after oil prices fell below $60 (£45) a barrel for the first time in almost five years as political leaders inch towards a Russia-Ukraine peace deal.

The price of a barrel of Brent crude dropped by more than 1% to $59.20 on Tuesday, its lowest since February 2021.

Wholesale oil prices have fallen by more than 7% this month, but the average petrol pump price has edged down by only a fraction of a penny, from 137.5p a litre at the start of December to 137.3p on Monday.

Diesel prices have also remained stubbornly high, falling from 146.9p a litre at the start of the month to 146.6p a litre this week.

Luke Bosdet, the AA’s spokesperson on pump prices, said forecourts were “creating misery for drivers and businesses”, with some raising prices as recently as last weekend despite the steady fall in the oil market.

“Essentially, average pump prices for the first half of December have been stuck on a plateau when they could have fallen,” he added.

Oil prices began to slide last month as traders assessed a potential end to the Russia-Ukraine conflict, and the possibility that sanctions against the Kremlin’s oil and gas exports may be eased and ultimately lifted.

The fall should have translated to a drop of 7p a litre by the end of last week, according to analysis by the AA, which would save a motorist filling the typical 55-litre tank more than £4.60 if passed on at the pump with VAT added.

Donald Trump said earlier this week that a deal to end the war in Ukraine was “closer now than we have ever been”, raising hopes among European leaders over an end to the conflict.

Volodymyr Zelenskyy, the Ukrainian president, has said proposals negotiated with US officials on a peace deal could be completed within days.

Martijn Rats, Morgan Stanley’s global commodities strategist, said a return to “historical trading patterns” would effectively release a fresh inventory of oil and gas supplies into the global market.

“Definitely tens of millions, maybe a few hundred million barrels could be made available because they are not locked up in these long routes any more,” he said.

Jorge Leon, the head of geopolitical analysis at Rystad Energy, said: “In the event of a ceasefire, US sanctions on Russian oil companies would likely be lifted relatively quickly, while European sanctions would probably be removed more gradually.

“At the same time, attacks on Russian oil infrastructure would come to an end. This would significantly reduce the risk of near-term Russian supply disruptions and allow a sizable volume of Russian oil currently stored on water, estimated at almost 170m barrels, to return to the market.”

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