Onyx Capital Group’s Harry Tchiliguirian said the oil balance is unlikely to shift meaningfully, adding that “Russians have been very good at circumventing these kinds of sanctions.”
Kremlin officials also stated that Russia has developed a certain resilience to Western restrictions, further reducing the sanctions’ potential bite.
Iran Talks and Sanction Risk Add to Geopolitical Watchlist
Focus is also turning to Iran, where nuclear negotiations with Britain, France, and Germany are set to resume in Istanbul on Friday. A breakdown in talks could lead to the reimposition of international sanctions, tightening one of the few remaining potential sources of supply growth.
While no immediate supply change is expected from Iran, the geopolitical overhang remains. For traders, a failure in talks raises the likelihood of stricter enforcement on Iranian exports, which would further narrow available barrels in an already delicate balance.
U.S. Tariff Deadline Adds Market Headwind
Meanwhile, U.S. tariffs on EU imports are scheduled to begin August 1, raising trade concerns that extend beyond oil. Commerce Secretary Howard Lutnick voiced optimism on reaching a deal with the European Union, but in the interim, tariff risk continues to cap crude’s upside.
IG analyst Tony Sycamore said market sentiment is being weighed down by the pending trade deadline. He added that any bullish surprise would likely need to come from a tightening in U.S. crude inventories.
