Oil prices rose in early Monday trading, buoyed by renewed optimism over U.S.-China trade relations and reinforced by sanctions-driven supply constraints. Brent crude futures climbed 46 cents, or 0.7%, to $66.40 a barrel, while U.S. West Texas Intermediate (WTI) crude gained 46 cents, or 0.75%, to $61.96. The gains build on last week’s sharp rallies of 8.9% and 7.7%, respectively, driven by U.S. and EU sanctions targeting Russian energy majors.
Our Analysts say the easing of trade tensions between the world’s two largest oil consumers could help stabilize global demand expectations, and also stabilzie oil prices.
Haitong Securities noted that the improved diplomatic tone is countering earlier concerns about oversupply, which had pressured prices earlier in October.
Geopolitical Impact on Oil Prices
Still, geopolitical risks remain a concern and are likely to affect oil prices. Sanctions on Russian firms Rosneft and Lukoil have tightened supply, but there are concerns that Russia may offset these measures by offering deeper discounts and deploying shadow fleets to attract buyers. “If sanctions prove less effective than expected, oversupply pressures could return,” warned Yang An, an analyst at Haitong Securities.
Tony Sycamore of IG added that the trade framework helps offset fears of Russian retaliation, but traders remain cautious. With central banks signaling dovish policy and trade diplomacy improving, oil markets may find short-term support—but structural uncertainties persist.
Also Read: Geopolitical Tensions Fuel Sharp Increase In Brent Oil Prices.
