Crude oil prices are likely to remain bearish, hovering around $70 per barrel, on the back of undisrupted global oil supply despite fresh European Union (EU) sanctions on Russian oil, experts told Moneycontrol.
On July 22, Brent crude futures fell and were largely trading around $68 per barrel as the oil market anticipated limited impact of new EU sanctions on supply while the ongoing trade war between major economies fuelled concerns over global economy.
The European Union, on July 18, approved the 18th package of sanctions against Moscow over its war in Ukraine, lowering the oil price cap on Russian oil from $60 a barrel to $47.6 per barrel, while also banning imports of refined petroleum products made from Russian crude coming from third countries.
The market, however, sees little to no impact on global oil supply of the new sanctions over expectations of undisrupted flow of Russian oil, as was observed earlier when the G7 group had announced the price cap of $60 per barrel.
“The supply of crude oil is not expected to be disrupted. Countries, including India, were buying Russian oil at the peak of war (in 2022). So, they would continue buying. Crude prices are expected to be in $66-$72 per barrel range (for the short-term),” Harshraj Aggarwal, analyst at Yes Securities told Moneycontrol.
Crude prices would also be supported by the oil cartel Organisation of Petroleum Exporting Countries and allies’ (commonly known as OPEC+) decision of ramping up output in a low-demand market.
“Prices are not expected to increase because supplies are also increasing from OPEC nations. Prices would remain in the $60-$70 (a barrel) band and not beyond $70. This is also because China’s consumption is slowing down and therefore overall (global) demand remains muted,” said Prashant Vashisht, VP & Co-Head, Corporate Ratings, ICRA.
OPEC—which accounts for around 40 percent of total global oil production—announced to ramp up output in April 2025 despite muted global demand. The oil cartel decided to unwind its announced 2.2 million barrels per day of production cuts on a monthly basis, beginning April, resulting in a well-supplied global oil market.
Global oil demand, on the other hand, is muted at present. The main reason for this is dampened demand from China, the world's biggest oil importer, due to a slowdown in that country’s economy.
Russia is a big player in the global oil market—accounting for around 10 percent of world’s total crude production. Any disruption in oil supplies from Russian would have major impact on crude prices.
Since the war broke out between Russia and Ukraine in 2022, Moscow directed its oil supply towards Asian market, primarily to India and China. This resulted in balancing the oil market.
India, which used to buy only 0.2 percent of Russian oil before 2022, now purchases around 40 percent of its oil from Moscow. India’s oil minister Hardeep Singh Puri on July 17 had said crude oil prices could skyrocket to $130 per barrel in the absence of India-Russia oil trade.
The oil minister added that India’s current oil relations with Moscow are important for the global oil market, adding that purchase of Russian oil by New Delhi has led to market stabilisation.
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