Oil prices moved higher on Monday as traders weighed the risk of fresh U.S. sanctions on Russia and ongoing Ukrainian drone strikes that could disrupt energy supplies.
Brent crude futures rose $1.20, or 1.77%, to $68.93 per barrel by 1:41 p.m. EDT (1741 GMT), while West Texas Intermediate (WTI) crude gained $1.29, or 2.03%, to $64.95.
“There seems to be a sense the peace talks are dragging on,” said Phil Flynn, senior analyst at Price Futures Group. He added that sanctions on Russia could follow if negotiations fail.
U.S. President Donald Trump reiterated on Friday that he would impose sanctions on Russia within two weeks if no progress is made toward a peace deal in Ukraine. He also warned India could face steep tariffs over its continued purchases of Russian oil.
Meanwhile, U.S. Vice President JD Vance said Russia had made “significant concessions” in the talks, acknowledging limits to its goals in Ukraine. Still, tensions remain high as Ukraine escalates attacks on Russian energy facilities. A weekend drone strike ignited a massive blaze at the Ust-Luga fuel export terminal, while another fire at the Novoshakhtinsk refinery continued for a fourth day. The refinery, which exports fuel, has an annual capacity of around 5 million metric tons, or 100,000 barrels per day.
Despite concerns over supply disruptions, prices were capped by OPEC+ reversing earlier production cuts, adding millions of barrels to global supply. The group is expected to approve another production boost at its September 7 meeting.
Investor sentiment also improved after Federal Reserve Chair Jerome Powell signaled the possibility of a U.S. interest rate cut in September. However, analysts noted that oil benchmarks still lack momentum, with growing concerns that Trump’s tariff policies could slow economic growth and weaken fuel demand.
