Oil prices edge higher on threat of tougher Russia sanctions

October 2, 2025 (MLN): Oil prices moved higher on Thursday, snapping a three-day decline and rebounding from their lowest levels in over four months. The uptick was driven by market concerns over potential tougher sanctions on Russian crude, though optimism was tempered by expectations of increased OPEC+ supply next month.

Brent crude futures decreased by $0.29, or 0.44%, to $65.06 per barrel. 

West Texas Intermediate (WTI) crude futures fell by $0.26, or 0.42%, to $61.52 per barrel by [3:30pm] PST.

Analysts noted that investors stepped in as WTI neared the crucial $60 support level. According to Hiroyuki Kikukawa, chief strategist at Nissan Securities Investment, heightened geopolitical uncertainty and speculation about new sanctions on Russian crude added momentum to the rebound.

Pressure on Moscow may soon intensify. On Wednesday, finance ministers from the Group of Seven (G7) vowed to tighten enforcement against nations and companies helping Russia skirt existing restrictions.

At the same time, the Wall Street Journal reported that Washington is preparing to provide Ukraine with intelligence to enable long-range strikes on Russian refineries, pipelines and other energy facilities a move intended to undermine a key source of revenue for the Kremlin’s war effort.

Despite the bounce, caution lingered in the market. A weakening global outlook, aggravated by the U.S. government shutdown, weighed on sentiment. Traders were also wary of signs that OPEC+ could significantly raise supply in November.

Additional headwinds came from U.S. inventory data. Figures from the Energy Information Administration showed crude stockpiles rising by 1.8m barrels to 416.5m in the week ending September 26, outpacing expectations of a 1m barrel build.

Gasoline and distillate inventories also climbed, showing weaker consumption and reduced refinery runs.

For now, oil prices are being pulled in opposite directions: the risk of disruption from geopolitics and sanctions versus the drag from rising supply and softer demand.

While Thursday’s rebound offered a brief respite, analysts warn that volatility will persist, with any escalation in Ukraine or fresh action from OPEC+ capable of driving sharp swings in prices.

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