Oil Prices Stable Amid EU Sanctions and Tariff Deadline

Crude oil futures remained stable, showing minimal reaction to EU sanctions on Russia and the upcoming US tariff deadline. The market was influenced by a "European summer effect," a seasonal decline in demand. With no significant changes in the supply and demand dynamics, crude oil prices are expected to remain steady.

Crude oil futures remained stable on Monday, showing minimal reaction to the latest European sanctions on Russia and the upcoming US tariff deadline. The market was influenced by a "European summer effect," a seasonal decline in demand. With no significant changes in the supply and demand dynamics, crude oil prices are expected to remain steady.

Brent crude futures rose 5 cents to $69.33 a barrel by 0040 GMT, while U.S. West Texas Intermediate crude was at $67.36 a barrel, up 2 cents [1]. The European Union approved the 18th package of sanctions against Russia over the conflict in Ukraine, which also targeted India's Nayara Energy, an exporter of oil products refined from Russian crude [1]. Despite these sanctions, analysts expect minimal impact on supplies, as the market believes that Russian oil will still make it to market [2].

The sanctions are part of a broader effort to pressure Russia over its war in Ukraine. However, the market is more focused on the potential impact of US tariffs on EU imports, which are set to kick in on August 1. The US Commerce Secretary, Howard Lutnick, expressed confidence in securing a trade deal with the EU, which could mitigate some of the negative effects on oil demand [2].

In the US, the number of operating oil rigs fell by two to 422 last week, the lowest since September 2021, according to Baker Hughes [1]. This decrease in drilling activity is expected to keep oil-focused drilling at subdued levels through the balance of the year [2].

Additionally, the outlook for larger crude exports from Iraq may boost global oil supplies and is weighing on prices. Expectations for increased Iraqi crude exports may also prompt Saudi Arabia to boost its crude exports to maintain its market share, further exacerbating a global oil supply glut [3]. The OPEC+ group is also boosting output to reverse a 2-year-long production cut, gradually restoring a total of 2.2 million bpd of production by September 2026 [3].

In summary, crude oil futures remained stable on Monday, with prices influenced by seasonal demand and expectations of stable supply dynamics. The upcoming US tariff deadline and EU sanctions on Russia are expected to have minimal impact on the market in the near term.

References:
[1] Reuters. (2025, July 21). Oil prices little changed as investors eye impact of new sanctions on Russia. Retrieved from https://www.reuters.com/business/energy/oil-prices-little-changed-investors-eye-impact-new-sanctions-russia-2025-07-21/
[2] Reuters. (2025, July 21). Oil slips little, impact of EU sanctions on Russia seen as minimal. Retrieved from https://www.reuters.com/business/energy/oil-slips-little-impact-seu-sanctions-russia-2025-07-21/
[3] Barchart. (2025, July 21). Crude oil prices slip on concerns of a mounting global oil supply glut. Retrieved from https://www.barchart.com/story/news/33537368/crude-oil-prices-slip-on-concerns-of-a-mounting-global-oil-supply-glut