Oil prices settled slightly lower on Monday as markets viewed the latest European sanctions on Russian oil as unlikely to significantly disrupt global supply. Brent crude fell 7 cents, or 0.1%, to $69.21 a barrel, while U.S. West Texas Intermediate declined 14 cents, or 0.2%, to $67.20.
The European Union’s 18th sanctions package targeted India’s Nayara Energy for exporting refined products made from Russian crude, but analysts say enforcement may be weak. Russia, meanwhile, dismissed the sanctions’ impact, claiming it had developed immunity to such measures.
Losses were limited by rising concerns over diesel supply tightness. The diesel crack spread firmed throughout the day, signaling that even if crude remains available, refined products like diesel could face shortages due to the sanctions. Gasoil’s premium to Brent closed at $26.31, the highest since February 2024.
Adding to supply-side constraints, the U.S. rig count fell by two last week to 422—its lowest since September 2021. Analysts expect drilling to remain subdued, though prices haven’t yet fallen enough to deter investment significantly.
Meanwhile, geopolitical risk lingers. Trump’s threats of sanctions on Russian oil buyers and Iran’s upcoming nuclear talks with European nations could reshape future supply dynamics. Tariff tensions with the EU also loom, raising broader concerns about oil demand and economic growth.