Oil rises in price after the introduction of the 18th package of EU sanctions
21 July 09:22
Oil prices are rising as traders analyze the impact of new European sanctions on Russian oil supplies. Investors are also worried about possible tariffs that could weaken demand for fuel at a time when Middle East producers are increasing production, "Komersant Ukrainian" reports citing Reuters.
According to OilPrice.com, futures for Brent crude oil rose 24 cents to $69.52 per barrel as of 09:07 Kyiv time, after closing 0.35% lower on Friday. U.S. WTI crude was trading at $67.68 per barrel, up 34 cents from the previous session, when it fell 0.30%.
EU sanctions
On Friday, the European Union approved its 18th package of sanctions against Russia, but Kremlin spokesman Dmitry Peskov said on Friday that Russia has developed some immunity to Western sanctions.
Indian company Nayara Energy, which exports petroleum products refined from Russian crude, was also subject to the restrictions.
The EU sanctions follow US President Donald Trump’ s threats to impose sanctions on buyers of Russian exports if Russia does not agree to a peace deal within 50 days.
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Iran and the United States
Iran, another oil producer under sanctions, is to hold nuclear talks in Istanbul on Friday with Britain, France and Germany, an Iranian Foreign Ministry spokesman said on Monday. This comes after warnings from three European countries that failure to resume negotiations would lead to the re-imposition of international sanctions against Iran.
In the United States, the number of active oil wells fell by two to 422 last week, the lowest since September 2021, Baker Hughes reported on Friday.
What experts say
ING analysts noted that the market is showing distrust in the effectiveness of the EU’s anti-Russian sanctions.
“The part of the package that could have the biggest impact on the market is the EU’s ban on imports of petroleum products refined from Russian oil in third countries. But it is obvious that it will be difficult to track the supply of crude oil to refineries in these countries and, as a result, to enforce the ban,”
– said analysts led by Warren Paterson.
Another factor that currently worries market players is the uncertainty about US policy toward the EU. U.S. tariffs on imports from the European Union are due to take effect on August 1, although U.S. Secretary of Commerce Howard Luthnick said on Sunday that he was confident that a trade agreement with the bloc could be reached.
“Concerns about US tariffs will continue to weigh on the August 1 deadline, while oil inventory statistics may provide some support if they show tight supplies. It looks like the range of $64-70 will be in effect next week,”
– said Tony Sycamore, market analyst at IG.
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