West Texas Intermediate (WTI) crude traded around $61.70 on Monday, up 0.65% on the day, as the market stabilized after a volatile week. Prices briefly crossed the $62 mark before retreating, extending a period of consolidation below $62.50 that has persisted since early October.
Record Iraqi exports raise supply concerns
Oil prices came under pressure following reports from Iraq’s Oil Ministry confirming record crude exports of over 102 million barrels in September. The data raised renewed concerns about potential oversupply within the Organization of the Petroleum Exporting Countries and its allies (OPEC+), even as Baghdad negotiates adjustments to its production quota to align with the group’s output targets.
US sanctions on Russian oil firms tighten supply outlook
Meanwhile, the United States has imposed sweeping sanctions on Russia’s major oil companies, Lukoil and Rosneft, freezing their assets and banning transactions with US entities.
Analysts at Société Générale said the move “represents the most forceful action Washington has taken against Russian businesses since the invasion of Ukraine.” The sanctions are expected to significantly curb Russian oil exports, helping to offset the impact of higher Iraqi output and lending support to global prices.
Trade optimism supports demand sentiment
On the demand side, optimism surrounding renewed dialogue between US President Donald Trump and Chinese President Xi Jinping is helping underpin crude prices. The two leaders are expected to meet later this week to finalize a preliminary trade agreement aimed at avoiding new tariffs and maintaining the flow of key materials between the world’s largest economies.
US Treasury Secretary Scott Bessent described the latest round of talks during the Association of Southeast Asian Nations (ASEAN) summit as “fruitful,” confirming that the US has temporarily withdrawn threats of 100% tariffs on Chinese imports. Beijing’s decision to delay restrictions on rare earth exports further signals progress toward easing trade tensions.
Traders await US inventory data
Overall, the combination of record Iraqi exports, tightening sanctions on Russian producers, and improving US-China trade relations continues to shape the short-term outlook for oil. Market participants now await this week’s American Petroleum Institute (API) inventory data for further direction on price momentum.
