Oil prices edged higher on Monday, adding to gains of more than 2 percent from Friday, as investors focused on further U.S. sanctions on Russia that may impact global supplies. However, a ramp-up in Saudi output and ongoing tariff uncertainty limited these gains.
Brent crude futures rose 15 cents to $70.51 a barrel by 04:00 GMT (currently trading above $70.50), extending a 2.51 percent gain on Friday. U.S. West Texas Intermediate crude futures climbed to $68.59, up 14 cents, after settling 2.82 percent higher in the previous session (currently trading above $68.60)
U.S. President Donald Trump stated on Sunday that he will send Patriot air defense missiles to Ukraine. He is expected to make a major statement on Russia on Monday. Trump has expressed frustration with Russian President Vladimir Putin due to the lack of progress in ending the war in Ukraine and Russia’s intensifying bombardment of Ukrainian cities.
To pressure Moscow into genuine peace negotiations with Ukraine, a bipartisan U.S. bill that would impose sanctions on Russia gained momentum last week in Congress, but it still awaits support from Trump. European Union envoys are close to agreeing on an 18th package of sanctions against Russia, which would include a lower price cap on Russian oil, according to four EU sources after a Sunday meeting.
IEA highlights tighter global oil market
Last week, Brent rose 3 percent, while WTI had a weekly gain of around 2.2 percent, following the International Energy Agency’s assertion that the global oil market may be tighter than it appears. This demand is supported by peak summer refinery runs to meet travel and power generation needs.
The International Energy Agency (IEA) reported that Saudi Arabia exceeded its oil output target for June by 430,000 barrels per day, reaching 9.8 million bpd, compared to the kingdom’s implied OPEC+ target of 9.37 million bpd. Saudi Arabia’s energy ministry stated on Friday that it had fully complied with its voluntary OPEC+ output target, noting that Saudi-marketed crude supply in June was 9.352 million bpd, in line with the agreed quota.
In other news, China’s June oil imports increased 7.4 percent to 49.89 million tons from a year earlier, equivalent to 12.14 million barrels per day, reaching the highest daily rate since August 2023, according to customs data released on Monday.
Read more: Crude oil prices rise to $68.74 amid OPEC+ output increases, escalating tariff concerns
Investors watch U.S. tariff talks
Investors are also monitoring the outcome of U.S. tariff talks with key trading partners, which could impact global economic growth and fuel demand. Oil prices saw an uptick on Friday following U.S. President Donald Trump’s announcement of an impending statement regarding Russia, which stirred the possibility of additional sanctions against the significant oil producer. However, concerns surrounding tariffs and increasing OPEC+ output limited the extent of these gains.
As of 04:08 GMT, Brent crude futures rose by 19 cents, or 0.28 percent, reaching $68.83 a barrel (currently trading at $68.74). Meanwhile, U.S. West Texas Intermediate crude increased by 24 cents, or 0.36 percent, to settle at $66.81 a barrel (currently trading at $66.72).
Throughout last week, Brent observed a 0.8 percent increase, while WTI experienced a slight decline of 0.2 percent. Both contracts faced a loss exceeding 2 percent on Thursday, driven by investor concerns over the repercussions of Trump’s shifting tariff policies on global economic growth and oil demand.
Trump has voiced his frustrations with Russian President Vladimir Putin due to the lack of progress towards peace in Ukraine and the escalating bombardment of Ukrainian cities by Russia. Additionally, tight market fundamentals coupled with improving seasonal demand have provided some support to oil prices, as have the recent Houthi attacks on vessels traversing the Red Sea, as noted by BMI analysts in their weekly report.
A notable indicator of demand improvement is the expectation that Saudi Arabia will ship approximately 51 million barrels of crude oil to China in August, marking the largest shipment in over two years.
OPEC+ increases production in August
Oil prices faced pressure last week from an agreement made on Saturday by the Organization of the Petroleum Exporting Countries and its allies, collectively known as OPEC+, to increase production by 548,000 barrels per day in August.
OPEC has revised its forecasts for global oil demand from 2026 to 2029, attributing the changes to a slowdown in Chinese demand, as outlined in its 2025 World Oil Outlook published last Thursday. The organization anticipates that global demand will average 106.3 million barrels per day in 2026, a decrease from the 108 million bpd estimated in last year’s forecast.
Oil prices declined on Thursday following U.S. President Donald Trump’s latest tariff announcements, which raised investor concerns about a potential deceleration in global economic growth and weaker oil demand. By 4:01 GMT, Brent crude futures had decreased by 0.03 percent to $70.17 a barrel, while U.S. West Texas Intermediate crude fell by 0.07 percent to $68.33 a barrel.
On Wednesday, Trump threatened Brazil, the largest economy in Latin America, with a steep 50 percent tariff on its exports to the U.S. following a public clash with Brazilian President Luiz Inacio Lula da Silva. This threat followed earlier proposals for tariffs on essential goods such as copper, semiconductors, and pharmaceuticals. His administration has also issued tariff notifications to countries like the Philippines and Iraq, adding to over a dozen others communicated earlier in the week, including to major U.S. trading partners such as South Korea and Japan.
