WASHINGTON (dpa-AFX) - Crude oil jumped on Monday, with a pause in negotiations for a peace deal between Russia and Ukraine triggering anxiety about Western sanctions holding longer on Russian oil exports.
WTI Crude Oil for October delivery was last seen trading up by $1.20 (or 1.89%) at $64.86 per barrel.
To end the three-year-plus Russian war with Ukraine, US President Donald Trump threatened Russia with sanctions on its billion-dollar oil exports with additional 'penalty tariffs' on its buyers and simultaneously pursued diplomatic efforts.
In the past two weeks, Trump held separate face-to-face meetings with Russian President Vladimir Putin in Alaska and later with Ukrainian President Volodymyr Zelenskyy at the White House.
Following the meetings, Trump stated that he was preparing for leaders of the warring nations to meet individually. However, he renewed a threat to impose more sanctions on Russia if there was no progress toward a peaceful settlement deal with Ukraine.
Vice President JD Vance stated in an interview that secondary tariffs on India (a major purchaser of Russian oil) are intended to make it harder for Russians to get rich from their oil economy.
This has given rise to additional supply side concerns on top of the recent decision by OPEC+ member nations.
Of note, the OPEC+ alliance has agreed to accelerate the unwinding of 2.2 million barrels per day in production cuts by September 2025 which risks oversupply even as global oil demand growth is projected to stagnate at 700,000 barrels per day in 2025 and 2026 due to the impact of US tariffs.
In the near short-term though, Northern Hemisphere summer travel coupled with power generation demand have driven refinery throughputs to record levels.
Last Friday's remarks by US Fed Chair Jerome Powell at the Jackson Hole Symposium in Wyoming, wherein there was a subtle indication of an interest rate cut in September has brought cheer to financial markets as a low-key interest regime could boost brisk global business activity as well as energy demand.
As crude oil is a dollar-denominated commodity, traders feel that its price could fluctuate based on September decision by the Fed.
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