Oil steadies near three-week high on signs of tighter supply

Oil prices steadied on Monday, holding close to their highest level in three weeks, as investors eyed further U.S. sanctions on Russia that may affect global supplies, while tariff uncertainty weighed. Brent crude futures rose 16 cents, or 0.2%, to $70.52 a barrel, while U.S. West Texas Intermediate crude futures climbed 12 cents, also 0.2%, to $68.57. Higher crude imports by China and expectations around U.S. President Donald Trump’s announcement on Russia are supporting prices, UBS analyst Giovanni Staunovo said. “There is still a perceived tightness in the market, with most of the inventory build in China and on ships, and not in key locations,” he said. Russia’s seaborne oil product exports in June were down 3.4% from May at 8.98 million metric tons, data from industry sources and Reuters calculations showed.
Trump said on Sunday that he will send Patriot air defence missiles to Ukraine. He is due to make a major statement on Russia on Monday, having expressed his frustration with Russian President Vladimir Putin due to the lack of progress in ending the war in Ukraine. A bipartisan U.S. bill that would hit Russia with sanctions gained momentum last week in Congress. European Union envoys, meanwhile, are on the verge of agreeing an 18th package of sanctions against Russia that would include a lower oil price cap. China’s June oil imports increased 7.4% on the year to 12.14 million barrels per day, the highest since August 2023, according to customs data released on Monday. Last week, Brent rose 3%, while WTI had a weekly gain of around 2.2%, after the International Energy Agency said the global oil market may be tighter than it appears. Investors are also eyeing the outcome of U.S. tariffs talks with key trading partners.
The European Union and South Korea said on Monday they were working on trade deals with the U.S. that would soften the blow from looming tariffs as Washington threatens to impose hefty duties from August 1. EU member states find Trump’s tariff threat “absolutely unacceptable”, Danish Foreign Minister Lars Lokke Rasmussen said on Monday during a joint press conference with EU’s Trade Chief Maros Sefcovic in Brussels.