Oil prices rise on Ukraine war, Russia sanctions fears
Oil prices rose on Monday as markets reacted to fresh geopolitical tensions and supply risks linked to the ongoing war in Ukraine and the prospect of new United States sanctions on Russia.
Brent crude futures gained 40 cents (0.6per cent) to USD68.13, while West Texas Intermediate (WTI) crude futures rose 46 cents (0.7 per cent) to USD64.12 by 13:15 GMT.
Analysts say traders are weighing expectations of increased supply in the coming months against the immediate risk of geopolitical disruptions.
“The market is somewhat concerned that these peace negotiations are going nowhere. In the short term, that is being challenged by a potential geopolitical disruption,” said Ole Hansen, Head of Commodity Strategy at Saxo Bank.
Tensions escalated at the weekend after Ukraine launched a drone attack on Russia’s Ust-Luga fuel export terminal, sparking a major blaze.
Another fire, caused by a similar strike, has continued burning for four consecutive days at the Novoshakhtinsk refinery, which processes around 100,000 barrels per day for export.
Adding to the volatility, U.S. President Donald Trump reiterated threats to impose new sanctions on Russia within two weeks unless meaningful progress is made in ending the war.
He also warned of possible tariffs on India over its continued purchases of Russian oil.
Some pressure was eased by OPEC+’s decision to reverse earlier production cuts, releasing millions of barrels onto the market. Eight OPEC+ members are due to meet on 7 September to consider a further increase in output.
Investor sentiment also improved after U.S. Federal Reserve Chair Jerome Powell signalled the possibility of an interest rate cut in September, a move seen as supportive of wider economic activity.
Still, market watchers caution that oil prices may struggle to gain momentum in the near term.
“Markets seem increasingly convinced that Trump’s tariffs will hit economic growth,” said Priyanka Sachdeva, Senior Market Analyst at Phillip Nova.
