Oil Prices Steady Amid Speculation Over U.S. Sanctions Policy

Oil prices remained relatively stable on Monday as expectations of U.S. President-elect Donald Trump easing sanctions on Russia's energy sector offset concerns about supply disruptions from recent harsher measures, Florence Tan reported for Reuters.

The Brent prompt spread widened to $1.27 per barrel on Monday, while WTI’s spread increased to 63 cents.

Brent crude futures slipped 6 cents, or 0.07%, to $80.73 per barrel by 0229 GMT, following a 0.62% drop in the previous session.

U.S. West Texas Intermediate (WTI) crude rose 10 cents, or 0.13%, to $77.98 per barrel for its expiring February contract, while the more active April contract edged down 1 cent to $77.38 per barrel.

Both benchmarks saw over 1% gains last week, marking a fourth consecutive weekly increase after the Biden administration imposed sanctions on over 100 tankers and two Russian oil producers.

These sanctions have heightened supply concerns, particularly for key buyers like China and India, leading to a scramble for prompt oil shipments and unsanctioned tankers.

Analyst Tim Evans noted in his Evans on Energy newsletter that these measures have driven higher tanker rates and widened backwardation in crude oil calendar spreads. Backwardation, where prompt prices are higher than future prices, signals tight supply.

The Brent prompt spread widened to $1.27 per barrel on Monday, while WTI’s spread increased to 63 cents.

Although the sanctions could affect up to 1 million barrels per day of Russian oil supply, analysts at ANZ caution that the impact may be short-lived, depending on President-elect Trump’s policies.