US crude earlier rose as much as 1.4% after the White House imposed sanctions on Iran’s oil minister and on more companies and vessels used by the OPEC member, while also restricting payment options for Russian energy, before paring the gains.
Still, the ceasefire negotiations unfolding between Russia and Ukraine, as well as macroeconomic risk, are holding traders’ attention for now, said Rebecca Babin, senior energy trader at CIBC Private Wealth Group.
The sanctions developments are “all just words until they’re enforced, so the market is less reactive to the headlines recently,” Babin said.
The potential return of Russian barrels comes amid projections the market already is headed for an oversupply. The IEA forecasts the global supply surplus is set to deepen as an escalating trade war pressures demand at the same time that OPEC+ is reviving output.
