Oil Prices Steady as Markets Weigh Russia Sanctions and Global Supply Risks
Oil prices remained largely flat on Monday as traders evaluated the impact of new European sanctions on Russian oil exports, while also factoring in concerns that tariffs could dampen global fuel demand, particularly as Middle Eastern producers ramp up output.
By 0655 GMT, Brent crude dipped 10 cents to $69.18 per barrel, following a 0.35% drop on Friday. Meanwhile, U.S. West Texas Intermediate (WTI) edged down 1 cent to $67.33, after falling 0.30% in the previous session.
The European Union on Friday passed its 18th round of sanctions targeting Russia over the war in Ukraine. The measures also included penalties against India’s Nayara Energy, which exports refined products made from Russian crude.
Despite these moves, Kremlin spokesperson Dmitry Peskov stated Russia has developed a level of resilience to Western sanctions.
The EU action followed U.S. President Donald Trump’s recent threat to impose sanctions on countries purchasing Russian oil unless a peace agreement is reached within 50 days.
According to ING analysts, the muted market response reflects skepticism about how effective these new sanctions will be. However, they noted that the EU’s proposed import ban on refined oil products made from Russian crude in third countries could be the most market-moving element.
Still, ING warned that enforcing such a measure would be difficult, as it’s hard to trace the origin of crude processed in foreign refineries.
In parallel, Iran—another sanctioned oil producer—is set to hold nuclear talks in Istanbul on Friday with Britain, France, and Germany, according to Iran’s foreign ministry. This comes after warnings from European powers that failure to resume negotiations could result in the reimposition of international sanctions.
In the U.S., Baker Hughes reported that the number of active oil rigs fell by two to 422 last week, the lowest level since September 2021.
Meanwhile, investors remain cautious ahead of the August 1 deadline for U.S. tariffs on EU imports, although Commerce Secretary Howard Lutnick expressed confidence on Sunday that a trade agreement with the EU could still be reached in time.
Tony Sycamore, a market analyst at IG, noted:
“Tariff concerns will likely pressure oil prices until the August 1 deadline, though signs of tight supply in upcoming inventory data could offer some support.”
He added that oil is likely to trade within a $64–$70 range over the coming week.
Since the June 24 ceasefire that ended the 12-day Israel-Iran conflict, Brent crude has been fluctuating between $66.34 and $71.53 per barrel.
