Economy
Crude Oil Market Falls Over Minimal Impact of Russian Sanctions
By Adedapo Adesanya
The crude oil market declined on Monday as the latest European sanctions on Russian oil were expected to have minimal impact on supplies, as investors weighing a potential drop in diesel supplies.
Brent crude futures went down by 7 cents or 0.1 per cent to $69.21 a barrel and the US West Texas Intermediate (WTI) crude futures lost 14 cents or 0.2 per cent to close at $67.20 per barrel.
The European Union (EU) approved on Friday the 18th package of sanctions against Russia over its war in Ukraine, which also targeted India’s Nayara Energy, an exporter of oil products refined from Russian crude.
Russia’s flagship Urals, which the EU has now capped at 15 per cent below its market price in an attempt to make the whole idea of a price cap work after indirectly admitting the current price cap, at $60 per barrel, did not stop the flow of Russian crude into international markets.
Market analysts said the 18th sanction package was unlikely to affect sentiment among oil traders given the ineffectiveness of previous packages. They also noted that the EU may agree to lower the price cap but without the US, the original $60 price cap cannot be changed.
The EU sanctions followed US President Donald Trump’s threats last week to impose sanctions on buyers of Russian exports unless Russia agrees to a peace deal within 50 days.
Meanwhile, worry continues about the potential impact of US tariffs on European Union countries and their demand for oil. That worry will probably remain in place until the end of the month, which should bring either a trade deal or the entry into effect of tariffs from August 1.
US Commerce Secretary Howard Lutnick said on Sunday that he was confident the US could secure a trade deal with the bloc. Market analysts have warned that tariffs are potentially negative for oil demand and economic activity.
Reuters reported that Iran, another sanctioned oil producer, is due to hold nuclear talks with Britain, France and Germany in Istanbul on Friday, an Iranian Foreign Ministry spokesperson said on Monday.
This development comes following warnings by the three European countries that a failure to resume negotiations would lead to international sanctions being reimposed on Iran.
