Oil prices experienced a decline as traders assessed the implications of the European Union’s recent actions concerning Russian oil supplies, coupled with Ukrainian strikes targeting Russia’s energy infrastructure. The West Texas Intermediate (WTI) contract for October delivery settled near $US63 a barrel. The more active November contract also saw a decrease, settling near $US62. The global benchmark, Brent crude, settled above $US66.
The EU’s forthcoming round of sanctions against Russia is set to target oil industry entities operating in third countries. This move is anticipated to affect approximately a dozen Chinese and several Indian entities, as the EU aims to intensify pressure on the Kremlin’s access to petrodollars. These sanctions are designed to further restrict Russia’s financial gains from oil sales, which are crucial to its economy.
China and India have capitalized on discounted Russian oil supplies, which remain accessible despite the Group of Seven’s price-cap mechanism. This mechanism was intended to maintain the flow of oil while simultaneously limiting Moscow’s revenue. While US President Donald Trump has reiterated calls for European nations to cease purchasing crude oil from Russia, French President Emmanuel Macron stated that the EU’s remaining energy imports from Russia are now “very marginal.”
