Oil prices stayed close to two-week highs on Monday. Investors expect the U.S. Federal Reserve to cut interest rates this week, a move that could support economic growth and increase energy demand. At the same time, markets are watching geopolitical risks that may disrupt Russian and Venezuelan oil supply.
By 07:22 GMT, Brent crude had risen 14 cents, or 0.22%, to $63.89 a barrel. U.S. West Texas Intermediate crude gained 15 cents, or 0.25%, to reach $60.23. Both benchmarks ended Friday’s session at their highest levels since November 18.
Markets now assign an 84% probability to a quarter-point rate cut at the Fed meeting on Tuesday and Wednesday, according to LSEG data. Still, comments from Fed board members suggest the meeting could be highly divided, increasing uncertainty around future policy decisions.
Geopolitical developments in Europe continue to add pressure. Ukraine peace talks remain slow, with major disagreements over security guarantees and the status of Russian-controlled territories. The U.S. and Russia also hold conflicting views on the peace plan proposed by President Donald Trump.
According to ANZ analysts, the potential outcomes of Trump’s latest push to end the conflict could shift global oil supply by more than 2 million barrels per day. Commonwealth Bank of Australia analyst Vivek Dhar noted that a ceasefire presents the biggest downside risk to oil prices, while long-term damage to Russia’s energy infrastructure could push prices higher.
Dhar also said that oversupply concerns may eventually return. He expects Russian oil exports to increasingly bypass sanctions, which could push crude futures toward $60 per barrel through 2026.
Meanwhile, the Group of Seven countries and the European Union are discussing replacing their price cap on Russian oil with a full maritime services ban, sources told Reuters. Such a move would likely limit Russian exports even further.
The U.S. has also increased pressure on Venezuela, a member of OPEC. Recent actions include strikes on boats accused of smuggling drugs and renewed talk of military intervention against President Nicolas Maduro.
In Asia, Chinese independent refiners have stepped up purchases of sanctioned Iranian oil. They are using newly issued import quotas and drawing from onshore storage, which is helping ease a supply glut.
