KEY POINTS
- Brent crude slips to $64.33 per barrel as traders weigh impact of U.S. sanctions on Russian oil firms.
- OPEC+ mulls modest production increase in December amid supply uncertainty.
- Indian refiners pause new Russian oil orders pending clarity on sanctions.
Oil prices slid by about 2 per cent on Tuesday, extending a three-day losing streak as investors digested the effect of fresh U.S. sanctions on Russia’s top oil producers and eyed potential output adjustments from the OPEC+ alliance.
Brent crude futures were down $1.29 to trade at $64.33 a barrel by mid-morning in London, while U.S. West Texas Intermediate (WTI) crude slipped $1.20 to $60.11.
The declines followed last week’s surge, when both benchmarks posted their biggest weekly gains since June after Washington imposed Ukraine-related sanctions on Russian energy giants Lukoil and Rosneft, the first such move of President Donald Trump’s second term.
Market analysts say traders remain uncertain about how much the sanctions will bite into Russia’s oil exports, or whether global supply could be quickly replenished.
“The oil market is still debating whether the latest sanctions will impact Russian oil exports or not,” said Giovanni Staunovo, an analyst at UBS. “Market players are slightly trimming the risk premium that was built in last week.”
OPEC+ weighs output boost as India halts Russian orders
OPEC and its allies, including Russia, are reportedly considering a modest increase in production in December after years of curbing output to prop up prices.
Sources close to the talks told Reuters that the group may be preparing to adjust output amid signs of market volatility.
Meanwhile, Indian refiners have temporarily stopped placing new orders for Russian crude since the sanctions announcement, awaiting further direction from their government and suppliers.
The decision underscores the cautious stance many Asian buyers are taking as geopolitical tensions add new layers of uncertainty to global oil flows.
Fatih Birol, Executive Director of the International Energy Agency, noted that the impact of the sanctions could be softened by existing surplus capacity across major oil-producing countries. “The effect of sanctions on oil-exporting nations will be limited in the near term,” Birol said on Tuesday.
Lukoil, Russia’s second-largest oil producer, has already begun taking significant steps in response to the sanctions, announcing plans to divest its international assets. It marks one of the most consequential corporate moves since Western nations began tightening restrictions on Moscow following its invasion of Ukraine in 2022.
