Oil prices surged on Monday during Asian trading, jumping more than 2% as escalating tensions between Russia and Ukraine, along with potential new U.S. sanctions against Russian crude, overshadowed OPEC+’s production hike.

Geopolitical Factors Driving Oil Prices

• Drone Strikes in Ukraine: Ukraine executed major drone operations targeting Russian territories, heightening supply concerns during fragile ceasefire discussions.

• Investor Behavior: The rising geopolitical risk premium led to Brent prices climbing to $64.23/bbl (+2.3%) and WTI at $61.23/bbl (+2.4%) as of 21:37 ET.

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Sanction Discussions on Russian Oil

• Proposed Legislation: Bipartisan support for a bill imposing a 500% tariff on Russian crude imports from nations that continue purchasing it focuses primarily on China and India.

• Supply Implications: If enacted, this bill could dramatically curtail Russian oil exports, tightening global supplies and further enhancing prices.

OPEC+ Relieves Supply Pressures with Modest July Increase

• Production Decision: OPEC+ confirmed a rise of 411,000 bpd, the third consecutive month at this production level.

• Market Context: Traders anticipated this standard decision, allowing oil prices to maintain momentum despite external geopolitical factors.