Global oil markets extended gains early Monday, as Brent and WTI crude built on Friday’s rally, buoyed by mounting geopolitical tension over Russia. Brent crude was up 15 cents to $70.51 a barrel by 0400 GMT, while WTI advanced 14 cents to $68.59 per barrel, after both benchmarks surged over 2.5% last week.
Investor attention is sharply focused on Washington, where President Donald Trump is poised to unveil a “major” statement on Russia, amid renewed U.S. support for Ukraine. Trump’s pledge to deploy Patriot missiles and growing bipartisan support for a new sanctions bill are stoking fears of further disruptions to global oil supply.
Meanwhile, the European Union is reportedly close to finalizing an 18th sanctions package that includes a lower price cap on Russian crude further constricting Russian oil exports and reinforcing market tightness.
Still, oil’s upward momentum faces resistance from broader trade and supply-side uncertainties. Trump has escalated his tariff crusade, issuing over 20 new trade threats, including against the European Union and Mexico, reigniting concerns over global economic stability and energy demand. Risk appetite remains shaky, as reflected in equity market weakness and a stronger bid for safe-haven gold.
On the supply front, the International Energy Agency (IEA) cautioned last week that summer demand could tighten markets more than expected, citing peak refinery runs. But Saudi Arabia’s unexpected production bump—exceeding its OPEC+ target by 430,000 bpd in June adds a layer of complexity to the supply-demand equation. The Saudi energy ministry insists marketed crude stayed within quota limits, pointing to potential discrepancies between production and exports.
In Asia, China continues to play a pivotal role in shaping oil flows. June oil imports surged 7.4% year-on-year to 12.14 million bpd, the highest daily rate since August 2023. Analysts expect China to continue stockpiling, though storage constraints now at 95% of peak 2020 levels mean more crude may appear in Western visible inventories, putting downward pressure on prices. Master the markets with MJFXM‘s expert-led trading courses – designed for beginners and pros to trade smarter and grow faster.
Meanwhile, the Federal Reserve remains in a policy limbo. Minutes from its June meeting revealed hesitancy about rate cuts due to resilient inflation and labor strength, compounded by Trump’s aggressive tariff posture. The U.S. dollar hovers near multi-week highs, which has stalled gold’s rally despite growing demand for safe-haven assets.
Investors are now focused on U.S. CPI and PPI data due this week for further guidance on the Fed’s next move. Until then, oil markets remain at the intersection of geopolitics, macroeconomic uncertainty, and evolving supply fundamentals.