Oil prices showed little change on Tuesday, maintaining a steady trend as investors weighed the opposing forces of oversupply fears and uncertainty following the latest U.S. sanctions targeting Russian oil exports.
Brent crude futures increased by 27 cents, or 0.42%, to $64.33 per barrel, while U.S. West Texas Intermediate (WTI) crude rose by 26 cents, or 0.43%, to $60.39 per barrel by 0922 GMT.
Market sentiment remained cautious as traders assessed how the sanctions would affect global oil and refined product flows. Russian energy company Lukoil declared force majeure at one of its Iraqi oil fields — the most significant disruption yet stemming from sanctions imposed last month.
PVM analyst Tamas Varga noted that restrictions on Russian fuel exports were helping to support prices despite broader crude oversupply. “Fresh U.S. sanctions on major Russian oil producers and exporters are weighing on product exports. As a result, heating oil/gasoil and RBOB gasoline are moving in a different direction from crude,” Varga said.
European refining margins for diesel reached nearly $31 per barrel — the highest level in 21 months — while gasoline margins hit 18-month highs of $21 per barrel.
However, analysts cautioned that ongoing increases in OPEC production could lead to a bearish outlook. Energy consultancy Ritterbusch and Associates highlighted that “as OPEC production increases grind on, global oil balances are turning more bearish, with demand still trending lower amid slow economic growth in major consuming nations.”
OPEC+ recently agreed to raise December output targets by 137,000 barrels per day but will pause production hikes in the first quarter of 2026.
Meanwhile, oil storage aboard tankers in Asian waters has reportedly doubled in recent weeks, as tightening Western sanctions complicated exports to China and India.
Broader financial markets gained optimism as the U.S. Senate advanced a bill to end the longest government shutdown in American history, potentially restoring federal funding and stabilizing investor sentiment.
