Brent crude futures fell 36 cents, or 0.55%, to $65.63 per barrel at 0333 GMT, while U.S. West Texas Intermediate (WTI) crude slipped 33 cents, or 0.58%, to $61.43 per barrel. Thursday had seen both benchmarks surge more than 5%, positioning them for roughly a 7% weekly gain.
“Crude is levelling off, some profit-taking is setting in, indicating the market is not hitting the panic button over Russian supply,” said Vandana Hari, founder of oil market analysis firm Vanda Insights. “It is likely to be wait-and-watch mode until the next twist in the saga, which could be an escalation or a de-escalation. Looks like the market is betting on the latter.”
The U.S. announced sanctions targeting Rosneft and Lukoil to pressure President Vladimir Putin over the war in Ukraine. Together, these companies account for more than 5% of global oil production. The sanctions prompted Chinese state-owned oil firms to suspend short-term purchases of Russian crude, while refiners in India—the largest buyer of seaborne Russian oil—are expected to sharply reduce imports, according to trade sources.
Janiv Shah, vice president of oil market analysis at Rystad Energy, noted, “Flows to India are at risk in particular … challenges to Chinese refiners would be more muted, considering the diversification of crude sources and stock availability.”
Meanwhile, Kuwait’s oil minister said that OPEC would be prepared to offset any market shortages by rolling back previous output cuts. The U.S. signaled readiness to impose further sanctions, while Putin dismissed the measures as largely symbolic, emphasizing Russia’s continued significance in the global energy market.
In addition to the U.S. and U.K., the European Union recently approved its 19th sanctions package on Russia, which includes a ban on Russian liquefied natural gas imports and adds two Chinese refiners with a combined capacity of 600,000 barrels per day, as well as Chinaoil Hong Kong, to its sanctions list.
Market participants are also eyeing an upcoming meeting between U.S. President Donald Trump and Chinese President Xi Jinping, which appears to have eased some recent trade tensions between Washington and Beijing. Analysts say any agreements reached at the summit could influence crude demand and trade flows, adding another layer of uncertainty to the oil market.