Crude Oil
Oil Prices Rise on Supply Concerns from Potential US and EU Sanctions
Crude oil prices climbed on Monday to their highest level in three weeks, supported by concerns over potential supply disruptions as the United States and European Union prepare additional sanctions against Russia.
Brent crude oil, the international benchmark for Nigerian oil, advanced by 58 cents or 0.8% to $70.94 per barrel as of 10:00 a.m. in Nigeria, while U.S. West Texas Intermediate (WTI) crude rose 59 cents or 0.9% to $69.04 per barrel.
The price movement comes amid rising geopolitical tensions as U.S. President Donald Trump announced on Sunday the deployment of Patriot air defense systems to Ukraine and is expected to issue a major policy statement on Russia on Monday.
Market participants are anticipating that the statement could include further energy-related sanctions, aimed at increasing pressure on Moscow to re-engage in peace talks with Kyiv.
In parallel, European Union envoys are nearing agreement on an 18th sanctions package targeting Russia.
The proposed measures include a lower price cap on Russian oil, a move that could further restrict supply from one of the world’s largest energy exporters.
“Heightened geopolitical risks, particularly regarding Russia, are once again putting upward pressure on oil prices,” said Giovanni Staunovo, analyst at UBS. “The market is responding to the potential for further restrictions on Russian oil flows.”
China’s crude oil imports contributed to the bullish sentiment with customs data released Monday showing a 7.4% year-on-year increase to 12.14 million barrels per day in June, the highest monthly total since August 2023.
Analysts noted that China’s continued stockpiling may boost prices in the short term, but storage constraints could lead to releases that may exert downward pressure on global prices in the future.
A note from J.P. Morgan’s research team highlighted that China’s crude inventories are now 95% of their 2020 peak, suggesting any excess may soon flow into the broader market.
Despite this medium-term risk, oil prices posted gains last week, with Brent crude up 3% and WTI up approximately 2.2%.
The International Energy Agency (IEA) indicated that the global market may be tighter than previously assessed, adding to concerns over future supply adequacy.
Investors are also monitoring U.S. trade negotiations with key international partners, particularly tariff discussions that could impact energy trade dynamics.
With crude prices climbing and sanctions likely to evolve in the coming days, market participants are expected to maintain a risk-sensitive posture.
The global oil market remains heavily influenced by geopolitical developments, supply-side dynamics and macroeconomic uncertainty with volatility expected to persist in the short term.