Oil prices were little changed on Monday as traders assess the impact of new European sanctions on Russian oil supply while they also worry about tariffs possibly weakening fuel demand as Middle East producers are raising output.
Brent crude futures fell 1 cent to $69.27 a barrel by 0153 GMT after settling 0.35 per cent lower on Friday. US West Texas Intermediate crude was at $67.44 a barrel, up 10 cents, following a 0.30 per cent decline in the previous session.
The European Union approved on Friday the 18th package of sanctions against Russia over the conflict in Ukraine, which also targeted India’s Nayara Energy, an exporter of oil products refined from Russian crude.
Kremlin spokesperson Dmitry Peskov said on Friday that Russia had built up a certain immunity to Western sanctions.
The EU sanctions followed US President Donald Trump’s threats last week to impose sanctions on buyers of Russian exports unless Russia agrees a peace deal in 50 days.
ING analysts said the lack of reaction from oil markets showed that the market is not convinced by the effectiveness of these sanctions.
“However, the part of the package likely to have the biggest market impact is the EU imposing an import ban on refined oil products processed from Russian oil in third countries,” the analysts led by Warren Patterson said.
“But clearly, it will be challenging to monitor crude oil inputs into refineries in these countries and, as a result, enforce the ban.”
Iran, another sanctioned oil producer, is due to hold nuclear talks in Istanbul with Britain, France and Germany on Friday, an Iranian Foreign Ministry spokesperson said on Monday. That follows warnings by the three European countries that a failure to resume negotiations would lead to international sanctions being reimposed on Iran.
In the US, the number of operating oil rigs fell by two to 422 last week, the lowest since September 2021, Baker Hughes said on Friday.
US tariffs on European Union imports are set to kick in on August 1, although US Commerce Secretary Howard Lutnick said on Sunday he was confident the United States could secure a trade deal with the bloc.
“US tariff concerns will continue to weigh in the lead up to August 1 deadline, while some support may come from oil inventory data if it shows tight supply,” IG market analyst Tony Sycamore said.
“It feels very much like a $64-$70 range in play for the week ahead.”
Brent crude futures have traded between a low of $66.34 a barrel and a high of $71.53 after a ceasefire deal on June 24 halted the 12-day Israel-Iran war.
