Oil dips slightly as Trump mulls relaxing Russia energy curbs

TOKYO: Oil prices were little changed on Monday as expectations of US President-elect Donald Trump relaxing curbs on Russia’s energy sector in exchange for a deal to end the Ukraine war offset concern of supply disruption from harsher sanctions.

Brent crude futures dropped 6 cents, or 0.07 per cent, to $80.73 a barrel by 0229 GMT after closing down 0.62 per cent in the previous session.

US West Texas Intermediate crude, which expires on Tuesday, was at $77.98 a barrel, up 10 cents, or 0.13 per cent, after settling down 1.02 per cent on Friday. The more active April contract fell 1 cent to $77.38 a barrel.

Both contracts gained more than 1 per cent in their fourth successive weekly ascent after the Biden administration sanctioned more than 100 tankers and two Russian oil producers.

That led to a scramble by top buyers China and India for prompt oil cargo and a rush for ship supply as dealers of Russian and Iranian oil sought unsanctioned tankers to ferry their load.

The new sanctions are seen curtailing supply, at least in the near term, analyst Tim Evans said in newsletter Evans on Energy.

While the new sanctions could impact the supply of nearly 1 million barrels per day of oil from Russia, recent price gains could be short lived depending on Trump action, ANZ analysts said in a client note.

Trump has promised to help end the Russia-Ukraine war quickly, which could involve relaxing some curbs to enable an accord, they said.

The incoming president, who will be inaugurated later on Monday, is also widely expected to make a flurry of policy announcements in the first hours of his second term, including an end to a moratorium on US liquefied natural gas export licences – part of a wider strategy to strengthen the economy.

Easing tension in the Middle East also capped oil’s gains.

Hamas and Israel exchanged hostages and prisoners on Sunday that marked the first day of a ceasefire after 15 months of war.

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