Brent Fluctuates, Markets Confused Between Sanctions and Supply
Oil prices experienced volatile movements on Tuesday (July 15th), amid market uncertainty over the impact of US President Donald Trump's policies on Russian exports and reports of supply from Saudi Arabia. Brent crude briefly traded around $69 per barrel after falling 1.6% on Monday, reflecting investor caution regarding geopolitical developments and global supply.
The main cause of this volatility was Trump's threat to impose 100% tariffs on Russia within 50 days if a peace agreement with Ukraine is not reached. Although the threat escalated geopolitical tensions, analysts expect no immediate impact on Russian energy exports. "Russia was given an extended deadline, so the market doesn't expect any immediate supply tightening," said Giovanni Staunovo of UBS.
Meanwhile, the Organization of the Petroleum Exporting Countries (OPEC) denied a report from the International Energy Agency (IEA) that Saudi Arabia increased its oil production in June. According to OPEC data, Saudi Arabia is still adhering to its production quota, and its excess output is being held in reserve, not released to the market.
Price pressure is also driven by concerns about a global oversupply, amidst OPEC+'s efforts to gradually increase production. Despite this, short-term demand appears to remain strong. The nearest Brent contract still commands a premium over the next month, reflecting optimism about near-term oil demand. Goldman Sachs analysts even raised their Brent price projection for this semester to $66 per barrel, while maintaining their 2026 outlook at $56.
Meanwhile, in Asia, data showed that refineries in China – the world's largest oil importer – increased production to the highest level in almost a year. Refining throughput rose to more than 15.2 million barrels per day in June, a positive sign for global oil demand amidst much uncertainty.
Source: (ayu-newsmaker)
