Oil Prices Slip As Investors Debate Effectiveness Of EU Sanctions On Russia

Oil prices edged lower on Monday as investors assessed the impact of the European Union’s new sanctions package on the Russian energy industry, amid uncertainty surrounding U.S. tariff policy.

Benchmark Brent crude prices fell 0.3% at $69.36 per barrel, while U.S. West Texas Intermediate crude prices slipped 0.3% at $65.86 per barrel at 4.24 ET.

Last week, the EU agreed to impose a lower price cap on Russian crude in its efforts to hit Moscow’s revenue as the Ukraine War continues to claim thousands of lives. Other measures from the 27-member bloc include additional banking restrictions and a ban on a large oil refinery in India, as well as several Chinese businesses, including two banks.

However, the U.S. had yet to agree on the new sanctions, which raised some doubts about the effectiveness of the sanctions, according to analysts.

"However, the part of the package likely to have the biggest market impact is the EU imposing an import ban on refined oil products processed from Russian oil in third countries," ING analysts said in a note, according to a Reuters report.

Retail sentiment on Stocktwits about the United States Oil Fund was still in the ‘bearish’ territory at the time of writing.

While the Trump administration has once again toughened its stance on tariffs, there are signs of positive trade talks between Washington, D.C., and its key trade partners. U.S. tariffs on European Union imports are expected to take effect from Aug. 1. U.S. Commerce Secretary Howard Lutnick expressed confidence on Sunday that the Trump administration would be able to reach a trade deal with the bloc.

Separately, Iran is scheduled to hold nuclear talks in Istanbul with Britain, France, and Germany on Monday, as the country seeks to avoid new sanctions.

The United States Oil Fund has fallen over 1% this year, while the SPDR S&P 500 ETF has gained 6.5%.

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