Oil prices rise slightly as markets await US sanctions on Russia

SINGAPORE: Oil prices inched up on Monday, building on last week’s gains, as traders watched for fresh US sanctions on Russia that could tighten global supply. However, rising output from Saudi Arabia and uncertainty around US trade tariffs kept the rally in check.

By 0400 GMT, Brent crude had risen 15 cents to $70.51 a barrel, after jumping 2.5 per cent on Friday. US West Texas Intermediate (WTI) crude was up 14 cents at $68.59, following a 2.8 per cent gain in the previous session.

The market is closely watching US President Donald Trump, who announced plans to send Patriot missiles to Ukraine and is expected to make a major statement on Russia. His growing frustration over Russia’s escalation in Ukraine has added urgency to bipartisan efforts in Congress to pass a new round of sanctions, though the bill still needs Trump’s backing. 

Meanwhile, the European Union is reportedly finalising its 18th package of sanctions against Moscow, which could include a lower price cap on Russian oil exports. 

Despite the geopolitical tensions, oil price gains were capped by signs of stronger-than-expected supply. The International Energy Agency (IEA) warned last week that global oil markets may be tighter than they appear, with summer travel and power demand pushing up consumption. Brent rose 3 per cent and WTI gained around 2.2 per cent for the week. 

However, analysts at ANZ said fresh data showed Saudi Arabia pumped more oil than its OPEC+ quota in June. The IEA estimated Saudi production at 9.8 million barrels per day (bpd), about 430,000 bpd above its target. Riyadh, however, maintains that its marketed crude supply matched its agreed limit of 9.35 million bpd. 

In Asia, China’s crude imports jumped 7.4 per cent year-on-year in June to 49.89 million tonnes, or 12.14 million bpd, the highest daily rate since August 2023. J.P. Morgan warned that with Chinese storage nearly full, these stocks could soon spill into global markets and weigh on prices. 

Investors are also keeping an eye on the outcome of US tariff negotiations with key partners, which could influence economic growth and global fuel demand. 

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