Oil Prices Steady as Geopolitical Risks Counter Supply Increases
LONDON – Oil prices are currently fluctuating between $60 and $70 per barrel as geopolitical tensions-including potential U.S. intervention in Venezuela and disruptions to Sudanese oil exports-are balanced by increased production from OPEC+ and other producers. The market remains particularly focused on the future of Russian oil exports as new sanctions loom.
The stability comes despite escalating global uncertainties. U.S. President donald Trump stated Monday he did not rule out deploying troops to Venezuela and indicated a willingness to engage in dialog wiht President Nicolas Maduro. Simultaneously, attacks on energy facilities in Sudan have disrupted crude oil exports, impacting South Sudan, which relies on Sudan’s infrastructure to reach international markets. These events are creating supply concerns,but are being partially offset by production increases intended to prevent important price spikes.
UBS analyst Giovanni Staunovo noted market skepticism regarding Russia’s ability to maintain export levels, as prices for Russian oil have fallen to thier lowest point in two and a half years ahead of upcoming sanctions. The approaching penalties are prompting questions about the fate of global assets held by Russian oil giant Lukoil, with Chevron reportedly considering options for potential acquisition. The U.S. has recently extended some exemptions to facilitate the sale of lukoil’s international assets.
Refining margins are also experiencing upward pressure due to ongoing attacks on russian energy infrastructure, outages at key facilities in Asia and Africa, and repeated shutdowns in Europe and the United States, leading to reduced diesel and gasoline supplies. Speculators have established their largest net long position on the European Diesel Index since 2022, signaling anticipated price increases.
