Oil Prices Slip as EU Targets Russian Energy in New Sanction
Oil prices slipped slightly on Monday as investors and markets focused on fresh European Union (EU) sanctions targeting Russian oil and awaited progress in trade talks ahead of the August 1 US tariff deadline.
Prices of crude oil have remained range-bound, hovering around $70 per barrel across grades amidst US tariff pressures and a bearish outlook on global economic growth in 2025.
China’s economic outlook faces significant pressures, and the EU’s export performance has been projected to retreat over higher US tariffs on exports. The international benchmark Brent crude fell around 0.11% to $68.52 per barrel, down from $68.60 at the previous session’s close.
The US benchmark West Texas Intermediate (WTI) crude decreased by 0.19% to $65.87 per barrel, compared to $66 in the prior session.
The European Union (EU) on Friday adopted its 18th package of sanctions targeting Moscow’s energy revenues. The new measures include lowering the oil price cap from $60 to $47.6 per barrel and introducing a dynamic adjustment mechanism.
Additionally, the EU sanctioned 105 more vessels tied to Russia’s so-called shadow fleet, bringing the total to 444, and imposed restrictions on related services. Russian and international shadow fleet operators, oil traders, and an Indian refinery linked to Rosneft were among the targets.
The new import ban also targets refined products made from Russian crude through third countries, excluding Canada, Norway, Switzerland, the UK, and the US. Oil imports to the Czech Republic will also lose their exemption.
The sanctions are being closely watched by markets for their potential supply impacts.
Last week, US President Donald Trump threatened to impose 100% secondary tariffs on Russia if a deal on ending the war in Ukraine is not reached within 50 days.
After meeting Trump at the White House, NATO Secretary-General Mark Rutte warned countries such as Brazil, China and India that secondary US sanctions could hit them if they maintain trade with Russia. “This might hit you very hard,” Rutte said, urging leaders of those countries to use their influence on Moscow for peace talks.
On the diplomatic front, Iran confirmed that a new round of nuclear talks with the UK, France, and Germany will be held in Istanbul, Türkiye, on July 25. The prospect of revived negotiations raised the possibility of easing sanctions and increasing future oil supply, adding pressure on prices in a market already wary of a potential surplus later this year.
Investor sentiment remained cautious as the Aug. 1 US tariff deadline approaches, with concerns that the tariffs could weaken fuel demand at a time when OPEC+ producers are increasing output. Reports that Trump is pushing for 15%-20% tariffs in EU trade talks added to market uncertainty. Trump also renewed his criticism of Federal Reserve Chairman Jerome Powell, calling him “too late” in his response to economic developments.
The president urged the Fed to lower interest rates, despite recent data showing the US Consumer Price Index rose 2.7% in June, up from 2.4% in May, and slightly above expectations.
Higher interest rates typically strengthen the US dollar, making oil more expensive for holders of other currencies and weighing on global demand. OPEC’s latest monthly report showed the group’s crude oil output rose by 220,000 barrels per day (bpd) in June to 27.023 million bpd. Production from the broader OPEC+ alliance climbed by 349,000 bpd to 41.56 million bpd during the same period.
While OPEC maintained its 2025 global demand forecast, it still expects a 1.3 million bpd increase this year, bringing total demand to 105.13 million bpd. However, analysts said the stable demand outlook alongside rising supply has deepened expectations of a surplus, adding pressure to prices.
Further sentiment was dampened after Trump announced new tariffs on July 12, escalating trade tensions with the European Union. The new package includes a sweeping 30% duty on all imports from the EU, effective Aug. 1, adding to existing sector-specific tariffs already in place. #Oil Prices Slip as EU Targets Russian Energy in New Sanction FAAC Distributes N1.818trn to FG, States, LGs
