Oil gained as traders braced for fresh US efforts to crimp Russian energy exports.
West Texas Intermediate advanced almost 3% to settle above $68 a barrel after President Donald Trump said he plans to make a “major statement” on Russia on Monday and reiterated criticism of President Vladimir Putin. One sanctions bill, which at least 85 senators have endorsed, would levy 500% tariffs on China and India if they make any purchases of Russian energy.
“The US could decide to impose new sanctions on Russia as early as the beginning of next week,” according to a report from Commerzbank AG. “Lower oil supply from Russia is probably one reason why oil prices have so far been able to absorb the significant increase in OPEC+ production so well.”
Limiting the rally, Trump also threatened a 35% tariff on some Canadian goods. The tax doesn’t apply to goods that are traded within the rules of the US-Mexico-Canada Agreement, and the exclusion is poised to remain in place. The US is also expected to keep a lower 10% tariff on some energy-related imports.
Saudi Arabia boosted its oil production above supply levels “briefly” in June amid heightened geopolitical tensions in the Persian Gulf, the country’s energy minister said in a post on X.
The comments followed a report from the International Atomic Energy Agency that Saudi Arabia raised crude output far above its OPEC+ output quota, joining other producers in a rush to export oil out of the region as Israel went to war with Iran.
“Traders are looking through the report, recognizing that the increase came during a period of extreme regional risk and strong local demand,” said Rebecca Babin, a senior energy trader at CIBC Private Wealth Group. “Notably, Saudi flows to China appear set to increase in August, with pricing remaining firm — a more important signal for the market than June’s overproduction.”
Separately, OPEC+ has been discussing a pause in further production increases from October, by which time it may have completed its planned revival of 2.2 million barrels a day of idle capacity. World oil consumption will grow by just 700,000 barrels a day in 2025, the slowest pace in 16 years excluding the 2020 pandemic slump, according to the IEA.
Oil Prices
WTI for August delivery rose 2.8% to settle at $68.45 a barrel in New York.
Brent for September settlement advanced 2.5% to $70.36 a barrel.
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