Published by Global Banking & Finance Review®
Posted on October 28, 2025
3 min readLast updated: January 21, 2026
Add as preferred source on GoogleOil prices dropped 2% as investors weighed U.S. sanctions on Russia and potential OPEC+ output increases. Market reactions remain cautious.
By Georgina McCartney
HOUSTON (Reuters) -Oil prices slipped about 2% on Tuesday and were on track for a third straight day of declines as investors considered the impact of U.S. sanctions against Russia's two biggest oil companies on global supply, along with a potential OPEC+ plan to raise output.
Brent crude futures <LCOc1> were down $1.36, or 2.1%, to $64.26 a barrel at 11:48 a.m. EDT (1548 GMT). U.S. West Texas Intermediate crude futures were down $1.29, or 2%, at $60.02.
Brent and WTI last week registered their biggest weekly gains since June, reacting to U.S. President Donald Trump's decision to impose Ukraine-related sanctions on Russia for the first time in his second term, targeting major oil companies Lukoil and Rosneft.
The U.S. government has provided written assurances that the German business of Russia's Rosneft would be exempt from the sanctions because the assets are no longer under Russian control, Germany's economy minister said.
"Trump giving Germany this waiver gives the impression that there could be more wiggle room on these sanctions, so this is taking away some of the immediate concerns that supplies could dramatically tighten. We definitely saw some risk-off (trading) today," said Phil Flynn, senior analyst with Price Futures Group.
The effect of sanctions on oil-exporting countries will be limited because of surplus capacity, Fatih Birol, the executive director of the International Energy Agency, said on Tuesday.
Following the U.S. sanctions, Russia's second-largest oil producer, Lukoil, said on Monday it would sell its international assets.
This move is the most consequential action so far by a Russian company in the wake of Western sanctions over Russia's full-scale war in Ukraine, which started in February 2022.
Moscow-headquartered Lukoil accounts for around 2% of global oil output.
INDIAN REFINERS HALT NEW ORDERS
Indian refiners have not placed new orders for Russian oil purchases since the sanctions were imposed, as they await clarity from the government and suppliers, sources told Reuters on Tuesday.
OPEC+, which groups the Organization of the Petroleum Exporting Countries and allies including Russia, is leaning toward another modest output boost in December, four sources familiar with the talks told Reuters.
Having curbed production for several years to support the oil market, the group started reversing those cuts in April.
"This raises the larger question as to how much spare capacity OPEC+ really has left," Flynn said.
The CEO of Saudi Arabian state oil company Aramco said on Tuesday crude oil demand was strong even before sanctions were imposed on Rosneft and Lukoil, and that Chinese demand was still healthy.
Rising OPEC+ output could help offset any curtailment to Russian barrels following U.S. sanctions, said Andrew Lipow, president of Lipow Oil Associates.
Investors are mulling the prospect of a trade deal between the U.S. and China, the world's two biggest oil consumers, with Trump and President Xi Jinping due to meet on Thursday in South Korea.
Beijing hopes Washington can meet it halfway to "prepare for high-level interactions" between the two countries, Foreign Minister Wang Yi told U.S. Secretary of State Marco Rubio in a phone call on Monday.
(Reporting by Georgina McCartney in Houston, Stephanie Kelly in London, Ashitha Shivaprasad in Bengaluru and Sam Li in Beijing; Editing by Conor Humphries, Rod Nickel and Paul Simao)
OPEC+ is a coalition of oil-producing countries, including OPEC members and other major producers like Russia, that coordinate oil production policies to stabilize or influence global oil prices.
Sanctions are penalties or restrictions imposed by one country on another to influence its behavior, often related to trade, finance, or diplomatic relations.
Brent crude oil is a major trading classification of crude oil originating from the North Sea, used as a benchmark for pricing oil globally.
WTI is a grade of crude oil used as a benchmark in oil pricing, primarily produced in the United States, known for its light and sweet characteristics.
Oil prices significantly impact global economies, influencing inflation rates, transportation costs, and overall economic growth, as oil is a key energy source.
Explore more articles in the Headlines category
