After hitting two-week lows in the previous session, Brent crude futures rose by 35 cents, or 0.6%, to $63.87 per barrel at 11:20 GMT, while U.S. West Texas Intermediate (WTI) gained 39 cents, or 0.7%, to $59.99.
According to analysts, the latest sanctions targeting Russia’s largest oil producers—imposed two weeks ago—have sparked concerns about potential disruptions to global supply chains. Despite robust output from OPEC and its allies, the penalties are beginning to constrain operations at key Russian firms such as Lukoil, whose overseas businesses are reportedly struggling to maintain operations.
“There is a little bit of an impact on prices (from the sanctions), but not a huge one,” said Jorge Montepeque of Onyx Capital Group. “Based on the numbers, it should be bigger, but the market still needs to be convinced there will be impact.”
Oil markets have been under pressure for months as fears of oversupply persist. Global crude prices fell for a third consecutive month in October, weighed down by increased production from both OPEC+ and non-OPEC producers. However, OPEC+’s recent plan to pause further output hikes in the first quarter of 2026 has helped ease immediate oversupply concerns, according to Haitong Securities.
Demand Concerns Persist
While supply risks are mounting, demand remains a weak link. Global oil consumption has risen by 850,000 barrels per day so far this year—slightly below J.P. Morgan’s earlier forecast of 900,000 bpd. The bank noted that “high-frequency indicators suggest that U.S. oil consumption remains subdued,” pointing to reduced travel activity and slower container shipments.
Adding to bearish sentiment, data from the U.S. Energy Information Administration (EIA) showed that U.S. crude inventories rose by 5.2 million barrels last week to reach 421.2 million barrels, signaling that domestic supply continues to outpace demand.
Outlook and Price Forecasts
Analysts at Capital Economics expect oil prices to remain under downward pressure over the next two years, forecasting $60 per barrel by the end of 2025 and $50 per barrel by the end of 2026, well below current market expectations.
Meanwhile, Saudi Arabia, the world’s top exporter, has cut prices for Asian buyers for December deliveries, responding to a market that remains comfortably supplied despite geopolitical tensions and production restraints.
As the year winds down, traders are weighing two opposing forces: tightening supply due to sanctions on Russia and expanding output from OPEC+, both unfolding against a backdrop of muted global demand. For now, those dynamics appear to be keeping oil prices in a delicate balance.