Crude oil prices edged lower but remained near four-month highs, with markets digesting the potential impact of new U.S. sanctions on Russian oil exports.
The market saw declines, but the sanctions targeting Russian companies Gazprom Neft and Surgutneftegas, alongside over 180 vessels in Russia’s “shadow fleet” could continue to drive market sentiment.
The sanctions are expected to reduce Russian oil exports, potentially cutting up to 700,000 barrels per day from global supply. However, actual disruptions might be smaller, as Russia and its key buyers explore alternative shipping arrangements. Demand uncertainty, notably from China, which recently experienced a decline in crude imports, adds a layer of complexity to the outlook.
While supply-side pressures from the sanctions are likely to provide support for global prices, weaker demand from key consumers could temper upward momentum.
Meanwhile, resilient U.S. economic data has bolstered the supply-demand balance, helping to sustain higher prices. Market participants are also closely monitoring U.S. economic data as well as the influence of the Federal Reserve interest rate decisions on the economy and oil demand.
