On July 14, 2025, Oil prices posted
modest gains on Monday, building on Friday’s upward momentum as investors
weighed the impact of geopolitical developments and evolving supply-side
dynamics. Brent crude futures rose by 21 cents, or 0.3%, to USD 70.57 a barrel
by 0651 GMT, following a 2.51% gain in the previous trading session. Similarly,
U.S. West Texas Intermediate (WTI) crude edged up by 20 cents, or 0.3%, to USD 68.65
a barrel, after closing 2.82% higher on Friday.
The price movement was primarily driven
by the potential for additional U.S. sanctions on Russia, which could restrict
global oil supplies. On Sunday, U.S. President Donald Trump announced plans to
send Patriot air defense systems to Ukraine and is expected to issue a
significant statement on Russia, further signaling growing tensions. Trump has
reportedly grown frustrated with Russian President Vladimir Putin due to
stalled peace efforts and continued Russian bombardment of Ukrainian cities.
In response to Russia’s ongoing military
actions, bipartisan momentum is building in the U.S. Congress for a new
sanctions package designed to pressure Moscow into sincere peace negotiations.
However, the bill still awaits formal support from Trump. At the same time,
European Union diplomats are nearing agreement on an 18th round of sanctions
against Russia, which is expected to include a reduced price cap on Russian
crude oil exports, according to EU sources.
Despite the upward pressure from
geopolitical risks, gains were tempered by supply-side concerns. The
International Energy Agency (IEA) reported that Saudi Arabia exceeded its June
oil output target by 430,000 barrels per day (bpd), producing 9.8 million
bpd—well above its OPEC+ commitment of 9.37 million bpd. However, the Saudi
energy ministry maintained that its June supply was 9.352 million bpd, in line
with agreed quotas.
On the demand front, China’s crude oil
imports rose by 7.4% in June year-on-year, reaching 49.89 million tons, or
12.14 million bpd. This marked the highest daily import rate since August 2023,
driven by strong seasonal demand. J.P. Morgan noted that with Chinese crude
storage nearing 95% of its 2020 peak, a rise in re-exports or the release of
inventories into global markets could increase visible supply and exert
downward pressure on prices.
Additionally,
investors are closely watching U.S. tariff negotiations with key trade
partners, as the outcome could influence global economic performance and energy
demand. In summary, while geopolitical tensions and seasonal demand are
providing support to oil prices, rising supply levels and economic uncertainty
are limiting further gains.