Oil prices edged higher on Monday as traders weighed fears of fresh disruptions to Russian supply. Concerns grew after new U.S. sanctions threats and repeated Ukrainian drone attacks on energy facilities inside Russia.
Brent crude gained 40 cents, or 0.6%, to $68.13 per barrel by midday. West Texas Intermediate (WTI) climbed 44 cents, or 0.7%, to $64.10.
Ole Hansen, head of commodity strategy at Saxo Bank, explained the mood of the market.
“The market is somewhat concerned that these peace negotiations are going nowhere,” he said. “In the short term, geopolitical disruption is challenging the view that supply will exceed demand later this year.”
Rising Tensions Over Ukraine
U.S. President Donald Trump warned on Friday that Washington will impose new sanctions on Russia if no peace progress is made in two weeks. He also threatened India with tariffs over its purchases of Russian oil.
Meanwhile, U.S. Vice President JD Vance insisted at the weekend that Moscow had made “significant concessions” toward a settlement in the 3½-year conflict.
But Ukraine has continued targeting Russian energy assets. A drone strike on Sunday triggered a massive blaze at the Ust-Luga fuel terminal.
Another attack set Russia’s Novoshakhtinsk refinery on fire, with the blaze burning into its fourth day. The refinery processes about 100,000 barrels of oil per day, mainly for export.
How much longer can Russian supply absorb these repeated shocks before the market reacts more sharply?OPEC+ and U.S. Interest Rate Outlook
Traders found some relief in OPEC+ decisions. The group has reversed a series of production cuts, adding millions of barrels back to global supply. Eight member countries are expected to meet again on September 7, with another boost on the table.
At the same time, investor sentiment improved after Federal Reserve Chair Jerome Powell hinted at a possible interest rate cut in September. But caution remained.
Priyanka Sachdeva, senior analyst at brokerage Phillip Nova, summed up the mood: “Both benchmark oil prices appear to lack momentum. Markets seem increasingly convinced that Trump’s tariffs will hit economic growth.”
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