US: lower oil prices amid sanctions pressure and trade risks

Oil prices continue to show a moderate decline after the first weekly drop since the beginning of the month. A barrel of Brent crude oil on international markets is trading near the $ 69 mark, having lost 1.5% over the past seven days. Investor sentiment is influenced by a number of key factors, from uncertainty in US trade negotiations to increased efforts by the European Union to curb Russian energy exports.

This week, the EU countries are preparing for the next round of consultations, the purpose of which will be to develop retaliatory measures in the event of a lack of agreements with Washington. The increased rigidity of the White House's position ahead of the August 1 deadline is causing concern in the European business community. Earlier, the European Union approved a package of sanctions against the Russian oil sector. It includes a reduction in the marginal cost of a barrel of Russian oil, restrictions on products made on the basis of Russian raw materials, as well as a ban on the activities of one of the largest oil refineries in India that uses Russian oil. The UK leadership has also joined these steps.

In response to the measures taken, the Chinese side expressed a strong protest, since two Chinese banks and several companies were included in the sanctions list. The Chinese authorities have declared their intention to protect the legitimate interests of their financial institutions and businesses. After the changes caused by the events of 2022, China and India became the main importers of Russian oil. Despite pressure from Western countries, supplies are still stable.

Since the beginning of May, the price of oil has shown growth, but the overall trend in 2025 is still downward. Brent has fallen by 7% since the beginning of the year. One of the reasons is the growing trade confrontation on the part of the US administration, as well as the gradual easing of supply restrictions by OPEC+countries. Additional pressure is exerted by geopolitical instability in the Middle East region, as well as sanctions imposed on oil exports from Iran and Russia.

Signals of tension are also coming from the European fuel market. The margin of oil-to-diesel processing reached its highest level since March 2024. The spread between the nearest diesel futures contracts has also increased, which indicates a short-term deficit and high demand volatility. This situation reinforces backwardation — a market structure in which the prices of immediate deliveries are higher than those of longer-term contracts.

Together, all these factors form an unstable picture in the global energy market. Investors continue to closely monitor the dynamics of negotiations and the development of sanctions policy, which can have a significant impact on global supply and demand.