Oil fell 2% as markets reassess sanctions impact and OPEC+ output plans

Oil prices fell nearly 2% on Tuesday, extending a three-day decline as markets reassessed the impact of US sanctions on Russia’s top oil producers and weighed prospects of fresh supply from OPEC+. The retreat has effectively unwound much of last week’s rally driven by fears of supply disruption.

Brent crude settled $1.22, or 1.9%, lower at $64.40 per barrel. 

WTI dropped by $1.16, also 1.9% down, to $60.15.

The retreat followed confirmation that Germany had secured exemptions from US sanctions for Rosneft’s local operations, easing fears of an immediate supply crunch and prompting a wave of profit-taking from traders. Expectations that OPEC+ may raise production in December—driven by members seeking to recapture market share—further pressured prices.

Underlying supply fundamentals remain heavy, with seaborne exports hitting record highs and inventories still elevated. The International Energy Agency (IEA) said the sanctions’ overall impact would likely remain limited given available spare capacity and Russia’s ability to redirect crude to other markets.

Additional OPEC+ output could offset any shortfalls, keeping near-term supply conditions balanced.

Oil could be on track for a third straight monthly loss as markets shift focus from last week’s sanction-driven rally to the prospect of rising supply and a cautious demand outlook.

Attention is now turning to the upcoming meeting between US President Donald Trump and Chinese President Xi Jinping, which could influence global demand expectations and risk appetite in the near term.

Written: Aiman Haikal