Oil prices continued their upward momentum in early Asian trading on Monday, building on last week’s gains amid growing speculation that the United States could impose fresh sanctions on Russia. Market sentiment also remained cautious due to rising global trade tensions following President Donald Trump’s announcement of new tariffs targeting the European Union and Mexico.
As of 21:22 ET (01:22 GMT), September contracts for Brent crude rose 0.2% to $70.48 per barrel, while U.S. benchmark West Texas Intermediate (WTI) futures gained a similar 0.2%, trading at $68.55.
Both benchmarks surged nearly 3% last week, with Friday’s rally fueled by comments from the International Energy Agency (IEA), which pointed to a tightening short-term supply outlook. According to the IEA, although OPEC+ surprised markets with a more substantial production increase, global supplies remain constrained as refiners increase output to meet peak summer travel demand.
Market Focus Shifts to Trump’s Pending Russia Announcement
Investor attention has now turned to a promised “major statement” on Russia, which President Trump said he plans to deliver Monday. Over the weekend, he confirmed plans to send Patriot missile systems to Ukraine, signaling deepening tensions with Moscow.
Trump has reportedly become increasingly dissatisfied with Russian President Vladimir Putin due to stalled peace talks over Ukraine. This has fueled speculation that Washington may introduce tougher sanctions aimed at restricting Russian energy exports.
In the U.S. Congress, a bipartisan effort to pressure the Kremlin through economic measures is gaining ground. A proposed bill would dramatically raise tariffs—up to 500%—on countries such as China and India if they continue importing Russian oil and gas. However, the legislation still awaits formal backing from the White House.
Tariff Headwinds Cap Oil Rally
While supply-side concerns are boosting oil prices, further upside may be limited due to escalating trade tensions. Over the weekend, Trump revealed plans to slap a 30% tariff on most goods imported from the EU and Mexico, effective August 1. This follows a broader tariff push announced earlier in the week, including duties on imports from Japan, South Korea, Canada, Brazil, and a steep 50% tariff on copper.
The increasingly aggressive trade stance has raised concerns about global economic growth. Trade barriers tend to dampen industrial output and international travel—both key drivers of energy consumption—raising the risk of weaker oil demand in the months ahead.
With less than three weeks to resolve looming trade disputes, markets are likely to remain on edge as geopolitical and macroeconomic risks collide.
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