Brent falls as some oil sanctions fear ease

The front-month ICE Brent contract has moved $1.96/bbl lower on the day, to trade at $68.92/bbl at 09.00 GMT.

IMAGE: Oil storage facilities. Getty Images

Upward pressure:

Brent’s price has found some support on the back of strong oil demand growth projection by the Saudi Arabia-led OPEC+ group of producers.

The Organization of the Petroleum Exporting Countries (OPEC) has forecast global oil demand to reach 123 million b/d by 2050, marking a growth of more than 19 million b/d since 2024.

OPEC projects Asia, Africa and the Middle East to be the key drivers of long-term oil demand growth. The market now awaits the group’s monthly oil market due later today.

Import data from China has also supported oil prices today. The country imported about 12.14 million b/d of crude oil last month, marking a month-on-month increase of 10.6%.

“Better [Chinese] refinery run rates supported these gains,” said ANZ Bank’s senior commodity strategist Daniel Hynes.

Downward pressure:

US President Donald Trump has reportedly dismissed the need for a Senate-backed sanctions bill on Russia, according to market analysts. This news has pushed Brent’s price lower.

The US President has instead proposed a 50-day window to reach a ceasefire deal with Ukraine, warning that secondary sanctions would follow if the talks fail.

“The pause eased concerns that direct sanctions on Russia could disrupt crude oil flows,” Hynes said.

Prices plunged lower after Trump also threatened to impose 30% tariffs on goods from the European Union (EU) and Mexico over the weekend, triggering fears of deteriorating trade relations that could weigh on global demand.

The announcement was followed by “a range of tariff demand letters last week that contained some of the highest rates on major US trading partners,” Hynes added.

By Aparupa Mazumder

Please get in touch with comments or additional info to news@engine.online